2015 HOLIDAY INSTANT REVIEW FINANCIAL LITERACY IN INDIANA MAKING A DIFFERENCE

The Official Publication of the North American Association of State & Provincial Lotteries

INSIGHTSMarch/April 2016

PLUS: From the President NASPL Staff David B. Gale Executive Director Thomas Tulloch Director of Administration Andrew White VP of Operations Tamika Ligon Director of Program Planning The lottery industry is one-of-a-kind. How many companies share product ideas, designs, research John Koenig Graphic Designer and sales techniques? You would never catch Apple Janine Hutzell Accounting sharing new smartphone features with Samsung. Patricia McQueen Editor And you would never see Taco Bell sharing product development information with McDonald’s. But Jake Coy Vendor Relations lotteries are different, and that is what makes this Mike Duff NSI Coordinator industry so unique. Since we operate within our own borders, without direct competition, it enables Paul Corey I.T. / Software Development us to share ideas, collaborate on products and strategize solutions. The more we work together, the stronger we become. NASPL Executive Committee This issue features holiday games, which have May Scheve Reardon President tremendous impact on lottery sales. Not only do we share our successes, but we can also glean new game and promotion ideas to use in our own lotteries. Holiday game Rose Hudson First Vice-President planning is right around the corner, so be sure to check out the article for ideas for your Charlie McIntyre Second Vice-President next holiday campaign. Alice Garland Treasurer Something else we all share is the need to offer responsible play. During the national David Barden Secretary focus on problem gambling in March, our own NASPL responsible gaming group was meeting to develop department-specific responsible gaming tracks for nearly half of Terry Rich Immediate Past President the breakout sessions at the upcoming NASPL Professional Development Seminar in David Loeb Pres. Interprovincial Lotteries Pittsburgh. Their plan is to develop a training course specific to each group, and to implement the new presentations during this year’s and next year’s seminars. Carole Hedinger Region I Director Paula Harper Bethea Region II Director Meanwhile, the has made great strides in responsible gaming by becoming only the second U.S. lottery to reach Level 4 accreditation with the World Randy Miller Region III Director Lottery Association (WLA). Congratulations on your achievement! Gary Grief Region IV Director

Speaking of responsible gaming, Director Gary Grief discussed this topic during a live stream on Facebook during March’s Problem Gambling Awareness month. This Facebook feature added last August is allowing lotteries to broadcast messages and events directly to our followers. Look for the article in this issue about the live streaming a second-chance drawing event. INSIGHTS It’s amazing how fast technology is changing. But one thing is for certain: the lottery industry will share, collaborate and embrace the changes and challenges together! Circulation: Insights ISSN 1528-123X, March/April 2016, Volume No. Sixteen, Issue Two. Published bi-monthly by NASPL (North American Association of State and Provincial Lotteries)

May Scheve Reardon 7470 Auburn Road, LL1 NASPL President Concord, OH 44077 Executive Director, © 2016 All rights reserved.

NASPL Email: [email protected] Web Sites: www.naspl.org / www.nasplmatrix.org P. 440.361.7962 2 INSIGHTS March/April 2016 F. 440.867.2327 For Mia, it’s more than manufacturing – it starts with the player experience.

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HOLIDAY INSTANT REVIEW

IN THIS ISSUE!

6 22 36 Around the Industry Call us “the Lotto” Online Triumph Committee for Securing Gaming Stephen Wade, Research and in Michigan Integrity update, New Jersey Lottery Development Manager, Washington’s The ’s online games Problem Gambling, and Virginia’s BIG Lottery and Principal, Lottery program has quickly developed into an Ticket! Management Consulting, LLC industry success story, and everybody wins. 12 26 By Patricia McQueen Making a Difference: Fully Engaged with Live Streaming Dwain Richard, Art Director, Louisiana In February, the New Jersey Lottery 40 Lottery held the grand prize drawing of its 2015 Holiday Ticket Review Million Dollar Replay for all to see, live A review of holiday ticket results 16 streaming a lottery event for the first around the country. Teaching Financial time. Literacy in Indiana By Patricia McQueen The Hoosier Lottery has partnered with a community college to offer 32 a unique online course on financial State of the Internet, Lottery Style literacy. It has rarely been easy, but lotteries By Patricia McQueen in the United States and Canada keep pushing forward into the world of online sales. By Patricia McQueen

4 INSIGHTS March/April 2016 INSIGHTS July/August 2015 5

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The tools you need to grow your business today… and tomorrow. That’s the brilliance of Aurora.

© 2015 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. INSIGHTS March/April 2016 5 Around the Industry

Committee for Securing Gaming Integrity Recognizes Two Industry Standards for Central Repository

he Committee for Securing Gaming Integrity (CSGI) is The CSGI does not create standards or endorse pleased to announce it has recognized two industry the development of standards. The CSGI is currently Tstandards for inclusion within its centralized repository. accepting best practices and technical standards from The CSGI is comprised of organizational and corporate around the global gaming industry. Interested entities gaming leaders who together, share a common voice on the should submit proposed standards electronically to recognition of standards that serve to protect the fairness, CSGI at www.csgi.org. Once a standard, regulation integrity, security and honesty of gaming. This recognition or protocol is brought before the Committee, a call provides confidence that the standards contained within for recognition vote is taken. Upon recognition, the the CSGI repository have undergone a peer review and are technical, regulatory standard or protocol will be placed recognized by the industry they serve. Recently accepted into the CSGI repository. submissions include: CSGI Members include – North American State and Provincial Lotteries, North American Gaming Regulators Submitted by Gaming Laboratories International, LLC: Association, IGT, The International Masters of Gaming Law, Central Account Management System, BMM • White Paper - Electronic Raffle Systems Testlabs, Gaming Laboratories International, British Columbia Gaming Policy and Enforcement Branch, Submitted by North American State and Provincial Lotteries, Pollard Banknote and Scientific Games. in association with The Open Group: Member Benefit – Participate on the CSGI and your organization will be part of a powerful voice on the • Implementation Guide: Best Practices of Quality Assurance recognition of standards used in the gaming industry. of Product Development in the Lottery Industry The CSGI is a standalone entity having no reporting obligation to any organization or industry association. • Quality Assurance of Product Development As such, the CSGI is not an association, allowing in the Lottery Industry: Requirements Definition neutrality for each participating entity to only represent • Quality Assurance of Product Development its own association. CSGI is currently accepting new in the Lottery Industry: Development Process committee members and there is no cost to join. • Quality Assurance of Product Development Charter agreement and member duties can be found at in the Lottery Industry: Acceptance Testing www.csgi.org.

Welcome to the NASPL Matrix NRI

www.nasplmatrix.org

6 INSIGHTS March/April 2016 Visit the NASPL Matirx at: www.nasplmatrix.org INSIGHTS March/April 2016 7 Around the Industry

New Jersey Lottery and the Council on Compulsive Gambling of New Jersey Raise Public Awareness of Problem Gambling

John Custodio, NJ Lottery Deputy Executive Director, and Neva Pryor, Executive Director of the Council on Compulsive Gambling of NJ, Inc. meet prior to 2016 Problem Gambling Awareness Month Campaign “Kick-Off” Event held at NJ Lottery Headquarters on March 2, 2016.

ew Jersey Governor Chris Christie issued a Council’s site, where members of the public can get free Proclamation declaring March 2016 Problem information and help. Gambling Awareness Month in New Jersey. The New Jersey Lottery has the distinct designation Throughout the month, the New Jersey Lottery (NJL) of being awarded a Level III Certification by the World Nworked with the Council on Compulsive Gambling of New Lottery Association, one of the world’s most respected Jersey, Inc. (CCGNJ) in an effort to educate the general public industry authorities on responsible gaming practices. This and health care professionals about the warning signs of award recognizes the Lottery’s planning, development and problem gambling and to raise awareness of the help that is implementation of responsible gambling programs and available both locally and nationally. “Have the Conversation” initiatives. was the focus of the joint themed programming. “The Council on Compulsive Gambling of NJ offers a broad R. John Custodio, NJL’s Deputy Executive Director, held a array of educational, outreach, and support services for those joint press conference with Neva Pryor, Executive Director the people affected by disordered and problem gambling and also CCGNJ, to discuss joint efforts to promote public awareness for the broader community,” said Pryor. “There are more ways about the dangers of problem gambling. than ever to get help and March is a great time to start the “We want everyone to enjoy playing the lottery as conversation. We’re very pleased to be partnering with the entertainment and remind our players to play responsibly,” Lottery to get the message out that discussing the “invisible Custodio said. “The Lottery joins with the Council today addiction” can lead to hope, help and change.” because we recognize that it’s important to “Have the CCGNJ operates a 24-hour confidential helpline, Conversation” about responsible play and raise awareness 1-800-GAMBLER, that takes over 15,000 calls a year. Any about how to recognize the warning signs of problem individual with a gambling problem or a family member gambling.” needing assistance can call for help and referral. Information Since June 1999, the Lottery has participated on the on Problem Gambling Awareness Month activities in New Council of Compulsive Gambling’s Board of Directors. The Jersey and additional resources can be accessed through the Council’s 1-800-GAMBLER helpline number is printed on every CCGNJ website: www.800gambler.org. Lottery ticket, and on all brochures and signage, and it also The National Problem Gambling Awareness Month website appears as a tag line on all of the Lottery’s radio and television also lists resources and helpful tools on its website: advertisements. The Lottery’s website directs visitors to the www.npgam.org.

8 INSIGHTS March/April 2016 INSIGHTS March/April 2016 9 Around the Industry Super-Size it!

Virginia Lottery’s “Super Ticket” generating super sales

alk about a big seller! The ’s Super Ticket Jewels Scratcher is a big game in every sense of the word. The ticket itself is imposing enough: 8 x 12 inches. Yet despite being too big to fit in the Tstandard retailer ticket display and self-service machine, it’s the best-selling $10 ticket in the Virginia Lottery’s 27-year history. “From the player’s standpoint, this is a ticket that grabs your attention,” said Virginia Lottery Executive Director Paula Otto. “Despite being available at only 85 percent of regular lottery retailers because of its size, the over-the- counter sales have been truly remarkable.” In eight weeks following the February 2 launch, sales surpassed $26 million. By comparison, the previous best- selling $10 game in Virginia sold $11.6 million through eight weeks. That means the inventory of Super Ticket Jewels is about 75 percent depleted. Virginia Lottery Director of Sales Rob Wesley expects the inventory to be gone by the end of April. “This game is selling more than two and a half times better than our average $10 game,” he said. “We’re hearing an amazing amount of buzz about this game from players and retailers.” As the name suggests, the ticket has a jewel theme in its four play areas: Emerald, Diamond, Ruby and Sapphire. At a $10 price point, the top prize is $500,000 and the prize payout is 72 percent. Designed in-house by Virginia Lottery graphics artists and printed by IGT, Super Ticket Jewels essentially contains four different games on the same ticket. The game’s first $500,000 winner, Shirley Braxton of Esmont, Virginia, said the size of the ticket and the four games are what attracted her. “The games are fun,” Ms. Braxton said as she claimed So while players have clearly taken a great liking to the her prize. “I like the games. It’s cheaper than buying all of super-sized game, there is an area in which a few players those games separately.” have a bit of confusion. Because the ticket displays four Displaying such a large ticket at the retailer brought a very distinct games in the play area, the Virginia Lottery’s whole new set of challenges. By utilizing a special Schafer validations team has received a few tickets in which players “cube” instant ticket dispenser, the ticket is displayed apart took a pair of scissors and cut the part of the ticket in which from the other Scratchers. This meant working with grocery they won and mailed it in. stores, who primarily use vending machines, to place the “It’s a new experience for everyone,” Otto laughed. “The ticket where it can be sold over the counter. It also meant response we’ve received from players is overwhelmingly creating a sign directing customers to ask for the ticket at positive, and that’s been reflected in sales. This is a great the customer service desk. game to say: ‘Super-size it!’”

10 INSIGHTS March/April 2016 www.alchemy3.com • 770 442-6993 INSIGHTS March/April 2016 11

A3MarAprAd_2016.indd 1 3/18/16 3:28 PM Dwain Richard, Art Director, Louisiana Lottery

reativity: involving the use of the imagination or original ideas in order to create something. For lotteries, it raises a difficult challenge, as they must balance the need to develop and sell attractive products to consumers with the need to manage public Cand political expectations. As Art Director for the Louisiana Lottery, one of the few American lotteries that produces all of its advertising and marketing materials in-house, Dwain Richard (pronounced ree share) has taken that definition to a whole new level in his 20 years at the Lottery. “I am exceptionally proud of the imaginative work accomplished by Dwain and his team,” said President Rose Hudson, “not just because of the creative awards that line the walls of our marketing department, but also because the artistry ingrained in our brand resonates so completely with our players.” Richard’s team includes two other graphic artists, one specializing in video editing and the other specializing in social media. They have their hands full with the needs of sales, marketing and communications, and Richard makes sure everyone is on the same track. “We try to keep consistent designs across all the materials, all the channels, and that’s a real challenge because of the different formats required. But it’s fun, and one of us is always learning something new. One advantage of technology that’s always getting better is that it’s getting simpler at the same time. What used to take multiple steps is now one push of the button.” He thrives on creativity, in turning a concept from marketing or sales into a ticket, a piece of POS, or a promotional campaign. And making that visualization work with the normal time and budget constraints of any business, but especially in a lottery operation. “It’s that whole process that gets my adrenaline going. I love the multi-tasking.” Not surprisingly, Richard’s spare time is heavily centered around art. “I love to get into the studio and create. It’s a release valve for me – it’s therapy.” He has geared up over the past few years, refining his technique and building a collection of works to resume exhibiting his artwork – something he had done fresh out of college. Over the years he has also designed posters for a number of events and festivals in Louisiana. And while his two daughters were in school, he was generous with his time, volunteering for school boards and heading up fund-raising efforts. A Louisiana native with a fine arts degree from Nicholls State University, Richard likes to live his art. His subjects are based on real life; for example, he’s often off shrimping or fishing and incorporates nature in much of his art. Centrally located in LaPlace with his wife Shelly, he enjoys easy access around the region to enjoy the best Louisiana has to offer.

12 INSIGHTS March/April 2016 Richard with Todd Ardoin, Art Director for Tony Chachere

INSIGHTS March/April 2016 13 What first brought you to the Lottery all those years ago? I answered a blind classified ad in the Times-Picayune for a graphic artist. I was working in an ad agency in New Orleans at the time, but the on-demand schedule was tough on someone starting a family. I was looking for an opportunity to join an in-house agency and I saw the ad. I sure was surprised when I got a call from the Louisiana Lottery – I was an occasional lottery player and I was wondering why they could possibly be calling me! I thought the job sounded interesting and was excited about seeing what the possibilities were – as it turns out, they were in the process of rebuilding their whole marketing department. At the interview, I thought this could be a great lifetime career move. And 20 years later, it has been exactly that.

What are the advantages of an in-house agency? The number one factor is that we get total control of our messaging. We do have an ad agency, but they only handle media placement. Everything else we do ourselves. We know we put out a good product and that we’ve marketed it correctly, so we feel good about it and it puts everyone at ease. It also helps that I can go out and regularly visit our retailers, so I can see first hand how things are going and what we need to do. Our sales reps help here – they provide us with great insight about the business. With corporate accounts in particular, it’s good to see the stores, which are often limited in terms of the point of sale materials they can use. I help them find that little niche, that perfect piece that will work within their guidelines.

How important is it for a lottery to produce locally-themed and inspired tickets and promotions? It’s very important to us. Lousiana-themed tickets are a core part of our branding – we like to celebrate our culture and the unique heritage that we have here. Our players love them – they like to have a sense of belonging and pride in their state. That said, these games are still niche products in our portfolio. It’s a delicate balance. There are so many factors, including when a game is launched and what other games are on the market at the same time.

What about the relative importance of ticket graphics and the details of the games (price and prizes)? Ultimately the prize structure has to be there – that’s the number one thing for players. But it all has to work together, and we have unique challenges here in Louisiana so we have to look at both the game mechanics and the ticket image, especially how it will appear to players in the dispenser. For anything larger than a $2 ticket, we have to fold the first ticket in each pack to use as a display card in the dispenser. That means we have to make sure the most important details of a game – name, price and top prize – will show above the fold. That all falls into design, and that’s where I come in. Because of this requirement, the look of the ticket is very important for sales here. In general, players do gravitate towards attractive tickets, but there are numerous factors affecting their preferences. Fluorescent inks done correctly in a great design work very well for us, and big, bold, graphics- heavy images with bright colors will easily catch peoples’ eyes at retail.

Where do you find inspiration in the art you create for the Louisiana Lottery? I’m bred and fed in Louisiana and I live it. As a graphic artist, I work at the Lottery eight hours a day, but the brain never gets turned off.

14 INSIGHTS March/April 2016 I’m constantly looking around for ideas for the Lottery as well as What are you most proud of over your nearly 20 years at for my own art. When I go to Mardi Gras, I look for new ideas for the Louisiana Lottery? next year’s ticket. When I eat crawfish, I’ll often find something Certainly I’m proud of the Louisiana-themed tickets that we do that would be a cool ticket. It’s who I am and what I do – I’m always – those are unique to us and I love the opportunity to design images walking into the office with little notes on Post-its; I jot down that are special to the state. And I am especially proud of enhancing everything I see as life happens. If you wish to see more, I recently the graphics department with technology and design, and going created an e-portfolio website of all of my works: dwainrichard.com. from one full-time designer to a staff of three full-time designers. Looking back, I’m also thrilled with the job we did hosting the 2003 Is there anything you’ve wished you could do at the Lottery NASPL annual conference and trade show. It was a huge challenge, but couldn’t for whatever reason? but I feel like we put our best foot forward. As a lottery, we do have to be conscious of everything we do, Aside from things I have had a hand in, I’m also very proud of and I think we’ve been very good at advertising and promotion just being an employee of the Louisiana Lottery. I’ve been through a within our guidelines. I suppose the one thing I wish we could do few difficult moments in life, and everyone stood behind me. I’m a more with is in-store awareness, and that takes a bigger budget. cancer survivor and a flooding victim (Hurricane Isaac). Those type Most of our retailers are convenience stores and supermarkets, and of things in life just catch you off guard, and it’s good to know you other companies – especially liquor brands – are really getting high work with a company that will stand behind you and help you. in-store awareness with signage, wraps and displays that scream “Hey, THIS product is sold here!” While we have done things in some stores – wrapping walls or counters among other things – it’s a budget challenge to do them all. So I’d just love to be able to do more things to create brand awareness in stores.

INSIGHTS March/April 2016 15 Teaching Financial Literacy in Indiana

The Hoosier Lottery has partnered with a community college to offer a unique online course on financial literacy. By Patricia McQueen

16 INSIGHTS March/April 2016 he Hoosier Lottery, already an industry leader in responsible gambling, is partnering with an Indiana educational institution in a unique financial literacy program for consumers and lottery players, offered as a free Massive Open Online Course (MOOC). Ivy Tech Community College, with campus locations throughout Indiana, was offering a free traditional eight-hour course Tfor its students, recognizing the need for them to better understand how to deal with budgeting, financial aid, student loans, etc. At the same time, the Hoosier Lottery was looking for sponsorship and partnership opportunities with educational institutions in the state. Ivy Tech approached Lottery officials, recognizing that its financial literacy course needed some reworking and could use the Lottery’s marketing expertise. In return, the Lottery would have a good community relations program and something helpful to its players. After all, winning a big lottery prize is often an overwhelming experience, and the biggest winners face life-changing circumstances. People with sudden and unexpected wealth have myriad decisions to make and sometimes find themselves barraged with offers to help. But there’s even room for regular players who haven’t won the big prize to learn about how to keep their lottery participation entertaining and fun without stretching their budgets. “We thought that this would be another good resource for our winners and our players, and even the general population of Indiana, to help them learn some of the basic financial skills everyone needs,” said Katie Carlson, Director of Corporate Social Responsibility and Compliance for the Hoosier Lottery, working with IGT Indiana. “We view our involvement as a long term strategy, creating shared value and exploring both business and social responsibility issues. We are getting a business benefit and are using our specialized skills to help the non-profit sector do something good for the people of Indiana.” Carlson showcased the experience at the New Horizons in Responsible Gambling conference in Vancouver in February. She was encouraged by the response from other attendees, including operators, researchers and treatment providers. “Overwhelmingly everyone thought it was perfectly appropriate for an organization within the gaming industry to do a financial literacy course.”

Course details

The content for the first generation MOOC came from Ivy Tech and therefore does not include any lottery-specific information. “Our initial objective was to coordinate the execution and market the course, since those are our strengths,” explained Carlson.

There are four modules within the course, each with a “knowledge quiz” at the end:

Module 1: Keeping track of your money; budgeting your money; financial planning

Module 2: Managing your money; managing your consumer credit use

Module 3: The importance of paying off your debt; buying a car; buying a home

Module 4: Investing to increase wealth; protecting your assets with insurance; planning for your retirement

INSIGHTS March/April 2016 17 Each session is an interactive experience for participants and uses videos and activities that are designed to be motivational and entertaining. Courses are self-paced and can be completed on individual schedules. It is designed to be completed in four hours, so it’s obviously a very concentrated version of the in-person course Ivy Tech had offered previously. Upon completion, recipients will receive a certificate. The course debuted with a media event at the end of February 2015. It received a lot of marketing attention initially, given that its launch was immediately followed up by Responsible Gambling Awareness Month (March) and Financial Literacy Month (April). The course has a dedicated site, www.LearnFinancialLiteracy.com. Through mid-January, there had been a total of 626 registrations for the course. The vast majority of participation came in the initial two months when there was public relations support. The fall-off since then shows that the program needs more consistent attention to promote awareness. Unlike many MOOCs, which have a built-in audience and rotating course content using a common entry point, this one is a stand-alone microsite without that regular traffic. Although just six percent of registrants completed the entire course, Carlson said that’s not unusual for MOOCs of this type, as it is a very intense course. She is very happy that 43 percent of people complete the first module, which features basic budgeting and planning. “From a responsible gambling perspective, that’s exactly what we want them to do. Even that alone is kind of daunting – it’s a pretty big step for some people if they haven’t been budgeting.” Initially, there was very little information on participants gathered, and that is something that was addressed in January, when a survey was added after the first module. The survey is designed to collect basic demographic information, get feedback on what parts of the course are most useful, and identify if the users are lottery players. As that information is collected in the coming months, Carlson and her colleagues will work with Ivy Tech to modify the course content to better serve the desired audience. One goal would be to add more information that would be useful to lottery players specifically. Another is to evaluate the resources needed to provide ongoing support to keep the program growing. “We are going to keep gathering more information, and hopefully we will be making some changes and improvements during the next fiscal year, after we have learned more about who is taking the course and how the knowledge is being put to use.” Ultimately, it would be ideal to know if the course has the desired effect on player behavior. “Obviously we’d love to know if we are helping to change player behavior for the better, and keeping the lottery play experience positive, because after all, that’s what lotteries are all about – fun for the players.” Carlson whole-heartedly endorses this type of program and encourages other lotteries to take a look at what they can do in their own jurisdictions. The real benefit right now is the interaction with the various stakeholder groups – particularly players and the treatment community. “Players have appreciated the learning experience, and it makes them approve of the Hoosier Lottery as a socially aware organization. The treatment providers just absolutely love the fact that we are doing this, and it reinforces our commitment to good corporate citizenship.”

18 INSIGHTS March/April 2016 INSIGHTS March/April 2016 19 Hoosier Lottery Granted WLA Level Four Responsible Gaming Certification

he Hoosier Lottery has been awarded the highest possible certification for excellence in responsible gaming by the World Lottery Association (WLA). Indiana is the second U.S. lottery jurisdiction to earn this distinction; California and Tother lotteries around the world also have attained the industry honor. “Responsible gaming is a core value of the Hoosier Lottery,” said Sarah M. Taylor, Executive Director of the State Lottery Commission of Indiana in a statement announcing the certification late last year. “Corporate social responsibility is put at equal value with driving sales, and we are pleased this has been recognized by the industry and international community.” The WLA is considered the global authority on lottery business and serves to advance the interests of lotteries around the world. The organization is comprised of state-authorized lotteries and gaming organizations from more than 80 countries on six continents. Level four certification is awarded by the WLA to select lotteries that have integrated responsible gaming into day-to- day operations and demonstrated continuous improvement in responsible gaming programs. Submissions are audited by an independent third-party assessor and then are reviewed by the WLA’s independent assessment panel – comprised of international experts in corporate social responsibility. The WLA has developed ten program elements including: research, employee program, retailer program, game design, remote gaming channels, advertising and marketing communications, player education, treatment referral, reporting and measurement and stakeholder engagement.

The Hoosier Lottery’s key accomplishments in responsible gaming include:

• Development of a free online financial literacy course for Hoosiers, in partnership with Ivy Tech Community College, available at www.LearnFinancialLiteracy.com.

• Comprehensive lottery retailer training, developed with problem gambling experts Bensinger, DuPont, and Associates, resulting in a 99 percent participation rate.

• Recipient of the National Council on Problem Gambling’s 2015 holiday campaign award for its public awareness campaign to discourage gifting lottery tickets to individuals under 18.

• Web-based employee training videos on responsible gaming and treatment referral.

• Player insight panels, a forum for players to give feedback on responsible gaming and marketing initiatives.

• Implemented a risk analysis software, via a third party, to assist game designers.

• Published an inaugural corporate social responsibility report in January 2015.

“A key strategy of Indiana Problem Gambling Awareness Program’s (IPGAP) commitment to the problem gambling community is to collaborate with organizations that hold these same strategies as a core business plan,” said Mary Lay, project manager for IPGAP. “The Hoosier Lottery maintains a standard of leadership to ensure their efforts are in tandem with current responsible gambling research and treatment, which impacts the constituencies we serve and helps to improve the expectations by which all gambling institutions in Indiana are held.”

20 INSIGHTS March/April 2016 HasbroAd_2015_NASPL_LI.pdf 1 10/28/15 11:29 AM

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www.scientificgames.com © 201INSIGHTS Scientific Games. March/April ll ights esere. 2016 21 Call Us “The Lotto!” The ad agency’s study of social media had documented that people were roughly as likely to say “the Lotto” as “the Lottery” when they evidently meant the institution, not the game.

Stephen Wade, Research and Development Manager, Washington’s Lottery and Principal, Lottery Management Consulting, LLC

mean, you have this old, boring game, not even your most people out. Other times all I have to do is play dumb. This “ important game, and people call you by that name? Like, time I took the easy way: Iyou’re old and boring? How do we get away from that?” “And the problem is what?” This was how Jade framed the issue she had been working “You’ve got half the population thinking that there is on, along with the creative team at their advertising agency. nothing more to your brand than that tired old Lotto game! The team had brainstormed ideas about how to ‘get away There are bigger brands, like and , from that:’ that have more brand equity, but you are not tapping into that! Let alone positioning yourself for anything new. Once 1) Retire Lotto. Replace it with a game where you choose they understand Lotto, they know you have nothing more to symbols, not numbers. offer!” 2) Change the name of the game. “Lottery” sounds too “And what do they understand about Lotto?” much like “Lotto.” “Well, they must know how to buy it, since most of 3) Change the name of the Lottery. Choose something that them have done that before. And they know that the tickets communicates the kind of entertainment we want to are cheap. And they know that the prize is not as big as in provide. Powerball.” “Do you think that they know the size of the top prize, The lottery asked me to swing by and talk with them. On from one draw to the next?” the phone, I gathered that the lottery felt uneasy with the “Remember the focus groups we had last October? Hardly direction things were taking. anybody knew the size of the jackpot…. even the ones who I settled into a conference room with Jade and Andrew. I said they had played that week. “ was the oldest person in the room by a margin of thirty years “When we asked, people just went for their phones,” said or so. We began by reviewing the research. They were pretty Andrew, who had attended all the sessions, “Even though we clear about sources and findings. had asked them to turn those off. But they do know that the “How many people call the Lottery, ‘the Lotto’?” I asked. jackpot increases if nobody wins.” The ad agency’s study of social media had documented “Do they know how the game is built; how it works?” that people were roughly as likely to say “the Lotto” as “the Jade answered, “You mean, like, how many balls, and all Lottery” when they evidently meant the institution, not the that? Probably not. I mean, I don’t know exactly, and why game. should they? We know that most of them let the machine “And how many people play the game, Lotto?” choose their numbers, right? The current tracking study from the Lottery reported that Andrew confirmed that the Lottery had told them that three quarters of the population over 18 reported playing least 80 percent of the tickets in Lotto were quick-picks. Lotto at some point in their lives, and that about a quarter had “Do they understand the odds?” played in the past year. “What’s to understand? The top prize is crazy hard to win. “And the older they are,” added Jade, “the more likely they But now and then, somebody wins it.” are to have played Lotto.” “How about in comparison to Powerball, or Mega Sometimes, I find, I have to work pretty hard to draw Millions?”

22 INSIGHTS March/April 2016 “I think people understand that those are even harder to different products, usually there is a progression in user win,” said Andrew. “But when you start talking about chances benefits that goes along with price. Here, it’s all basically one of one in a million, one in ten million, one in a hundred price, and the value proposition as you go up the ladder is million… you know, I hear the ‘million’ part, and that’s all I ‘a worse and worse chance at a bigger and bigger prize.’ It’s need to hear. Ten, a hundred? No big difference. All nearly hard to differentiate among the products that way. It’s hard impossible.” to say that one is better than the other.” “You know, the proof point is, does anybody win? And “And yet you feel like you had rather have the Lottery people do. I couldn’t say that they win a lot more often in linked with Powerball than with the in-state Lotto game?” Lotto than in Powerball. Just the Lotto winners are all from “It’s a more powerful brand.” here, and the Powerball winners usually are not.” “Does it have to be one or the other?” “Comparing Powerball, Mega Millions, Lotto and This question did not get an immediate response, and I whatever,” said Jade, “it’s confusing that they all basically went on: cost the same.” “You see, I’m pretty much on board with how your “Powerball is $2.” players look at these games. To me, they are all variations on “Right! They’re all cheap. So, either I’m in, as a matter of one thing. You remember I’m sort of a game mechanic, right? habit, or I’m not; the difference between $1 and $2 is just To me the similarities among your lotto game, Mega Millions, not worth talking about. If it takes something special to get Powerball, and your five-number jackpot game are much me to play, then again the barrier is not the cost of the ticket, more meaningful than the differences. It’s like you have four but the break in my routine.” flavors of ice cream. They are distinct, yes, but is one better “And you know,” added Andrew, “when a company has than the other? And the generic term for these is ‘lotto.’ And

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[email protected] www.jumbointeractive.com INSIGHTS March/April 2016 23 if the outfit that sells them is ‘the Lotto,’ what’s not to like possible number combinations for the top prize, yet allows about that?” us to pay a better-than break even prize to about one play “How can you claim that ‘lotto’ is a generic term!?” out of 54. So when we talk about the overall odds of the “Well there are a couple of ways of explaining that. One game, of course we are talking mostly about that prize.” is historical, and the other has to do with math. Which do “Even better, Lammers’ game provided for the top prize you prefer?” to grow from one drawing to the next if it was not won. The Jade looked as if I had offered her a choice of sand or probabilities do not change, but the top prize gets bigger and bugs on her ice cream. bigger.” “Let’s go with history. Have I ever told you that I lived “What they call progressive, right?” asked Andrew. in Germany for a while, and knew people who had been “Exactly. Now, I understand that the word ‘lotto’ had American prisoners of war- that is, Germans whom we had been in use in Europe for some time, to describe some kind captured?” of game of chance. You may recall the English expression ‘to “You can’t be that old,” said Jade. “That was like, a draw lots,’ invoking a chance process…” hundred years ago?” At this point I realized that I had slid into my professorial “These folks were youngsters during the Second World persona, and was probably telling people more than they War, but yes thank you, even that was over before I was really wanted to know. So I squelched any further etymology, born. These guys got caught up in it, and each one I met was and also any further travel stories, and said, “So they called very glad to have been captured by us. Now, I did not know this new game ‘Lotto 6/49.’ It happens that that field size, the fellow who invented Lotto personally, but he was among that is the 49, works pretty well in lots of countries that have that lot - a fellow by the name of Lothar Lammers. We kept from a few million to several million potential players. It him in France for a while, and after we released him, he went worked so well in so many places that ‘Lotto,’ in that form, home to Muenster in northern West Germany and took up came to mean just this: a game of chance that provides a the cause of rebuilding sports fields; for soccer mostly. A huge top prize that grows, and also some more winnable simple enough thing but it still needed money. And people prizes.” did not have a lot of money. He figured out how to build a “OK,” said Jade, “I get that Lotto is a thing with a name, game for his good cause. It could have a huge top prize, but and it works for lots of places. But why do you say that the was cheap to play. It had a compelling value proposition: You other games are offshoots of Lotto? And I don’t get why you pick six numbers, we will too; if our numbers match yours we think it’s OK if players call us ‘the Lotto’.” will pay you at least a million times the cost of your ticket. “Well, Lotto 6/49, unlike the earlier numbers games, did And you don’t have to match the numbers in order: how not work very well if you have fewer than a million players. hard can it be?” To get that sort of player base, you need a big connected “What do you mean, ‘in order’?” infrastructure, and basically you need to be the only game in “Do you remember our ‘Pick 3’ game? It’s a numbers town. This is more than informal gambling networks could game where order matters. You pick from the numbers zero put together. That is why ‘Lotto’ was, and still is, pretty much through nine, three times. Zero, one, three is a different synonymous with games that are offered by government- choice than three, one, zero. You can pick any number sanctioned monopolies, like us. So if players call us ‘the between 000, and 999: one thousand choices. This game has Lotto,’ I think they are calling out a truth about the situation. been around for a really long time. It usually pays 500 times It’s a particular kind of value proposition, and we are the only the wager for an exact match. You can build it out to four place to get it.” numbers, and let it pay 5,000 to one. If you were to build Andrew said, “Wait. So, you’re saying that not only is it it out to six numbers, you could let it pay half a million to sort of the defining game for a state monopoly, but in order one. But the thing is: there is only the top prize. You cannot to run it you have to be a monopoly? How about now, where afford to pay the top prize, and also lesser prizes for ‘almost’ if you were on the Web, you might be able to get several matching. Or if you do pay for partial matches, you must million people playing from all over?” dramatically reduce the top prize.” “I’m sure you are right that things are different now. But “This sounds more like math than like history,” said Jade. the monopoly idea made a lot of sense in the last century. “OK, you’re right. So, back to postwar Germany. “Also, speaking of newer developments, Lotto 6/49 does Compared the games known up until that time, Lammers’ not work so well if you have tens of millions of players: the innovation allowed for a big top prize that is really hard to jackpot does not get a chance to grow. So when people win, and also lesser prizes that are within what players will started working on the idea of bigger games, across different reliably win if they play long enough. And yet it is just as states, they needed to match a bigger player population to a profitable as the old ‘numbers’ games. The trick that allowed bigger field of choice, that is, more than 49. But as the field this was to say that the order of drawing the numbers does gets bigger, it gets harder to match those three numbers to not matter at all. Further, each number can only be drawn win a small prize. In order to keep the overall odds attractive, once. But the range of choice is 1 through 49, rather than they ‘split’ the field so that we draw five numbers from one 0 through 9. Taken together, this gives nearly 14 million big set, and one number from another, smaller set. We can

24 INSIGHTS March/April 2016 pay people for matching just that one number from that used some other kind of symbol, rather than numbers, it might the smaller set, and manage the overall odds that still be ‘lotto’ to me.” way. Powerball and Mega Millions are built that way. I was not at all sure that I had communicated effectively in this They are just derivatives of Lotto.” session. But to my surprise, both Jade and Andrew seemed to have “On the other end, if you want to offer a smaller assimilated something that interested them. top prize that gets won more often, you can make the Andrew asked, “Do you think the Lotto derivatives are pretty well field smaller, and pick fewer than six numbers. That’s built out? I mean, is there anything else to be done?” how your five-number game works.” “I am sure there is still potential for new lottery games derived It dawned on me that I might have shared about from Lotto.” as much of my own perspective as made sense for Jade asked, “Can you make a chart for us that shows how all the meeting. I offered to wrap it up by tying back these games are related? You know, something to use for reference?” to the results of the agency’s brainstorming. “So, I have done that, and I will share the chart in a future article. anyway, from both the historical and math points of view, these games are all different flavors of the same thing. And it’s been a government-monopoly thing. So whatever they call it, that’s what we are, at least on the draw-games side. From my point of view, you Stephen Wade might consider embracing the ‘lotto equals lottery’ Research and Development Manager, Washington’s idea, rather than refuting it. But along with that, Lottery and Principal, Lottery Management you understand, I am including maybe four of your current games, and certainly Powerball and Mega Consulting, LLC Millions, when I say ‘lotto.’ And, if you put up a game

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26 INSIGHTS March/April 2016 econd chance drawings are nothing other semi-finalists – including some of the media, due to the difficult nature of the new to the lottery industry. In fact, winners – were able to watch the event as it market – it is very difficult to get broadcast they are an often-used tool for happened live, and even participate through media, in particular, to cover New Jersey lotteries to offer more value to their live comments on social media. Lottery events. “Live streaming would Splayers. Whether they are associated with a “We believe this is the first time a lottery create an opportunity for the news media specific game or applicable across a lottery’s has live-streamed an event,” said Chief to participate in our events without having products, they give players additional Communications Officer Judy Drucker. “It was to actually send someone to be there.” They chances to win cash or merchandise prizes. so exciting.” could tap into the live stream, or pick up the For five years, the New Jersey Lottery In 2011, the New Jersey Lottery became video file for later broadcast, for example. has held its Million Dollar Replay program, the first American lottery to live stream But that really was only half the picture in which players submit $10 worth of non- drawings on the internet, forced into that – just as important is player engagement. winning instant tickets for each entry into the development after it lost a public television Through live streaming, “you can get drawings. Entries must be submitted online outlet for those drawings. Although its people involved with your brand, with through the Lottery’s VIP Club. Millions of drawings have since returned to television, the event, without them having to be at a entries are submitted for each quarterly New Jersey remains in a challenging media physical location. It’s a wonderful use of the drawing, at which 100 semi-finalists are market, sandwiched between New York technology we all take for granted these chosen, each receiving $250. Those semi- and Philadelphia. So lottery officials are days.” finalists are then entered into a grand prize always looking for ways to make it easy for drawing for a $1 million top prize and 14 mainstream media to pick up newsworthy Cutting-edge technology other prizes ranging from $100,000 down features. to $10,000. The program is funded with a Then in 2013, a big Powerball winner hile live-streaming the event portion of the unclaimed prize fund, and has from New Jersey brought media coverage was a major accomplishment been very popular since its inception in 2011. from around the world, and Drucker began to in itself, the way it was But there was something new for the germinate an idea. Why not do live streams done makes it even more grand prize drawing held in February for the with a big lottery winner, or at some of the Wrevolutionary for the lottery industry. 2015 edition of Million Dollar Replay. The lottery’s events, with the ability of the public Michael DeCheser, the Lottery’s Broadcast event at the War Memorial in Trenton, N.J., to follow along and comment as it was and Media Director who spearheaded that attracted some 125 semi-finalists and their happening? first live streaming of drawings years ago, guests, and some of them walked away with For Drucker, the primary initial goal pulled out all the stops to have the most prizes. But more importantly, about 275 was to get engagement from mainstream flexible and reliable technology available

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INSIGHTS March/April 2016 27 for Million Dollar Replay. “The technology came. First the hardware was tested before it link was placed on the Lottery’s home page, we used was pretty cutting edge,” he said, was even acquired, and after the purchase, it but one of the best things about it was being explaining that it was a completely mobile was tested again, feature by feature, to make able to tap into some 10,000 players already solution – no internet feed required at the sure everything was configured properly to following the Lottery’s Livestream account. location, no wi-fi networks, no limiting cables produce the desired result. After successful The live streams can also be incorporated or cords anywhere. tests at Lottery headquarters, the next into the Lottery’s Facebook account for Working with Livestream, an industry step was to test at the actual location – to viewing there as well. leader in broadcasting live events, DeCheser verify the signal strength, for example, and So if, for example, there’s a press uses one of the company’s mobile making sure all was well. Once everyone was conference with a big winner at a retailer, broadcasters, a little piece of hardware not comfortable that it would work, Northstar “we now have the ability to grab a camera much larger than a deck of cards. That is New Jersey started the campaign to promote and our streaming solution and literally connected to a USB 4G wireless card, which the grand prize drawing event in Trenton and run out the door, and be streaming right is then connected directly to a camera. its availability on the Lottery’s Livestream to the New Jersey Lottery Livestream Tweak the software, provide the device channel. channel,” said DeCheser. The Lottery can information to the Lottery’s Livestream Completely untethered, DeCheser and send an immediate alert to those 10,000 account, hit a couple of buttons and “boom, his team could find the best viewpoints at followers, telling them of breaking news on we are shooting live over a 4G network right the venue, and change locations to capture the channel. Or even send out a message to to the web page for the event. It’s pretty more of the look and feel of the event. Some hundreds of thousands of VIP Club members cool,” he explained. of that coverage is being assembled into a notifying them of the upcoming event. Before the live event, DeCheser took the ‘sizzle reel’ to showcase the event for future In addition, the Livestream channel is time to thoroughly test the equipment, the purposes, such as getting people enthused also embedded into the Lottery’s mobile app, connection, every little nuance, to make sure about next year’s edition. so users can just click on a link in the app and there would be no hiccups when the day During the live streaming of the event, a be watching live from their mobile device.

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INSIGHTS March/April 2016 29 “So no matter where you are, you can watch names drawn live from the comfort of their with an “OMG that’s ME” followed by anything that we are streaming live, anytime, own living room (or office, or neighborhood slew of congratulations from others. “The anywhere,” DeCheser emphasized. coffee shop – you get the idea). And while bottom line is that everyone was incredibly “It really is amazing,” added Drucker. “We watching that Livestream channel, users can engaged,” emphasized Drucker. “These were are right in peoples’ hands, and can hit the add realtime comments. “That’s really the real live winners who were virtually THERE.” demographic so involved in mobile and also excitement of it,” said Drucker. “You can see So while the ability to provide live video allow them to engage directly with us.” comments from players who are, in real time, to mainstream media remains an important engaged in our event remotely through the use of the technology, the opportunities use of this Livestream application.” for customer engagement are simply As it turned out, almost every one of unmatched. Total engagement the winners not in attendance watched “I’m sure we will be using this technology it streaming online and that’s how they again fairly soon,” said DeCheser. “I think hat engagement comes from ability found out they won. The husband of the it’s going to be a fantastic asset moving to have social media conversations $1 million top prize winner saw her name forward,” agreed Drucker, who can’t wait to as the events are happening. For announced on the live stream and hurriedly come up with another event to stream live the February grand prize drawing, called his wife, who then proceeded to before the next Million Dollar Replay grand Tmany of those who could not be at the War watch the recorded video over and over to prize drawing in March 2017. Memorial were able to watch the live stream. let it sink in. And there were hundreds of Some of the winners even watched their own comments as the event was taking place,

30 INSIGHTS March/April 2016 NASPL 2016 Professional Development Seminar August 2-5, 2016 Pittsburgh, PA wwww.nasplprofessionaldevelopment.com INSIGHTS March/April 2016 31 FOCUS ON: INTERNET SALES

STATE OF THE INTERNET, LOTTERY STYLE

It has rarely been easy, but lotteries in the United States and Canada keep pushing forward into the world of online sales.

By Patricia McQueen

32 INSIGHTS March/April 2016 he pace has been deliberate, In the United States, the Illinois Lottery don’t offer single-game sales at this time. but North American lotteries are broke through in 2012, becoming the first They include New Hampshire, New York, gradually moving into the realm of American lottery to offer individual ticket North Carolina, North Dakota and Virginia. online sales. Unlike other consumer sales online when it went live in March As we document the history of this new Tbusinesses, lotteries face regulatory and of that year with Mega Millions and Lotto channel for lotteries, it should be noted that other challenges that have slowed online (Powerball was added later). Then came the Minnesota Lottery launched single- development to a relative crawl. Gradually, the , with a soft launch in ticket online sales in 2013 (it already sold industry stakeholders are coming around to November 2012, offering Mega Millions, subscriptions via the internet) and was the the reality of the world in which we live. As Powerball and Fantasy 5 online. Keno and first American lottery to introduce online more lotteries show how it can be done, and instant games have since been added to the instant games in February 2014. However, in done well, more will follow as the demand to online offering. May 2015, the Minnesota State Legislature produce revenues for good causes grows. The went a different voted to end the Lottery’s ability to sell Around the world, lotteries offering route, taking advantage of the casino games games online, and sales through that channel products through online channels is nothing offered at its racetrack casinos by offering ended in late August 2015. new – Finland’s national lottery operator online casino games in partnership with the Veikkaus was the very first lottery to offer racetracks, and they debuted in November The Illinois experience online games in December 1996. One of the 2013 after a one-day test that October. With world’s largest lotteries, the U.K. National the limitations of a small state population, he first American lottery to launch Lottery, has been offering sales via the they have generated little net revenue – just online sales almost became a internet since 2003, starting its journey over $4.5 million in online net win from second casualty, as Illinois’ program with online instant games. Many other inception through the end of February. That stemmed from a “test” that was lotteries around the world have developed compares with over $943 million in net win Tsupposed to last four years. On March 25, solid business models offering their games from the bricks and mortar casinos over the 2016 the day the pilot program might have to players at retail and through online and same 28-month period. expired without extension, the Illinois Lottery mobile channels. The Michigan Lottery made a huge splash issued a statement that after extensive Despite retailers’ fears that online on the internet when it jumped into the review, internet ticket sales were allowed lottery sales will hurt retail sales, there is no waters in August 2014 with instant games; under current law and would continue. evidence of that. Lottery after lottery will tell in January of this year selected draw-based It’s no surprise that Lottery officials were you two things – the increased awareness games were added to the online offerings eager to keep the online option available to of lottery by making it available through (see separate story.) its players. online and mobile channels actually benefits Back to Canada, Ontario Lottery Four years after online sales launched retailers, and the online option captures new and Gaming finally joined its Canadian on March 25, 2012 – just before a record players who probably would not otherwise counterparts in early 2015 with its online $656 million Mega Millions jackpot – sales be purchasing any lottery tickets at all. Every venture, focusing mostly on the casino side continue their upward slope, and remain lottery’s goal is the broaden the player base, of its business but offering the big national an important source of revenue for Illinois and the ability to purchase tickets online has lotto games online. schools. clearly helped do that. And at this writing, the With just three games available online Just ask any of the North American expects to launch its online sales program in (Lotto, Mega Millions and Powerball, the members of the online club. the next few months with instant games and latter added a few months after the initial selected draw-based games. launch), sales have increased incrementally North American progress Many other lotteries are exploring each year. Through March, total sales logged their own options. For example, in late since inception were more than $56 million, tlantic Lottery and the British December the with $17.3 million coming in FY15 alone. Columbia Lottery Corp. are the issued a Request For Information about During the frantic days leading up to the senior members of the group in “potential iLottery systems and/or software, world-record Powerball drawing early this North America, both launching the implementation of new game offerings year, Illinois achieved record sales both via Atheir online operations in 2004. ALC offers through online and/or mobile venues, the internet and at traditional retailers. a variety of lottery games, while BCLC gaming systems that allow for cross- During the nine days prior to the big drawing, takes it to another level with a full range pollination between online applications Illinois tallied more than $2 million in of online casino games in addition to its and physical retailer space and any other Powerball internet sales—a new benchmark. lottery products. That is also true of Loto- progressive gaming opportunities that may “Internet sales have broadened Illinois’ Quebec, another full-service lottery and be available.” Responding by the March 4 player base, and remain on the cutting edge gaming operator in Canada, which launched deadline were 20 broadly diverse companies, of ever-advancing technologies that continue its online platform in 2010. All lotteries from the obvious big players to smaller to evolve within the lottery industry,” said in the country also offer sports betting, companies satisfying various niches in the Director of Communications Steve Rossi. which is tailor made for online action. BCLC industry – or hoping to do so. Lottery officials “Future marketing and technology platforms recently became the first Canadian lottery are currently reviewing those responses. will take lottery delivery systems, and sales, organization to offer a Sports Pool game, Still other lotteries have a small online to new heights—with Illinois striving to be which gives sports fans an easy new way to presence with a subscription service for among the leaders in that projected growth.” play. some of their draw-based games, but they

INSIGHTS March/April 2016 33 FOCUS ON: INTERNET SALES

Fourteen months and Loto-Québec’s first venture counting in Ontario into online games was with poker in 2010. Casino games followed, then sports betting, ntario launched its PlayOLG online and finally the lottery draw site in January 2015. Mirroring the games were added beginning experiences of BCLC and Loto- in August 2012. “Experience Québec, Ontario’s biggest online games” (instant lottery games) Obusiness comes from its selection of casino made their online debut in games. Unlike those two organizations, February 2015. however, Ontario has limited its lottery Poker and the casino offerings on PlayOLG, at least for the time products were available at being. espacejeux.com, and when Although OLG has a large selection of online lottery games were lottery games in its product mix, most remain added to the mix, they were only available at retail locations. Only the placed on a separate website. national lottery games – Lotto 6/49, Lotto Although players have only one Max and Encore – are currently offered mechanics over those with more casual online account to access all games, there is online, with no immediate plans to add gaming structures. That may be because of fairly clear separation between the different others. OLG remains committed to providing the separate casino and lottery websites online environments. Internally, there were more opportunities for its retailers through – players already on the lottery site were also separate Loto-Québec divisions handling new games and other services. For example, known lottery players, so perhaps it’s not online casino games and online lottery it extended the hours of operation for the surprising that they gravitated towards games. But all that is changing. Beginning lottery retail terminal network, adding 90 themes and play styles they were familiar with the current fiscal year (which just minutes of sales time on draw nights so with. began April 1), Loto-Québec has combined retailers could keep selling tickets until closer Another lesson was that certain brands its online activities into the same operating to draw time. really resonate with players, and it makes division, and over the next few months there “In a very competitive environment, we sense going forward to take more of the will also be a website transition, with a new are pleased that every day more players are popular retail ticket brands and offer them site becoming the single destination for all registering, making deposits and playing the as online instant games. For example, things online offered by the organization. games or buying lottery tickets,” said Ryan Crossword did quite well online, as did an “We changed our internal structure to get P. Bissonnette, OLG’s Senior Manager for instant draw version (Lotto 6/49 Express) of more synergy out of all the types of games Communications and Media Relations. the national game Lotto 6/49. we have,” said Robert Lalonde, Director As a more recent entrant, OLG was able One big brand will soon be launched of Gaming Operations for espacejeux. to examine more data coming in from other across Loto-Québec’s entire product line – com, adding that there are numerous internet-enabled jurisdictions in Canada taking advantage of both the brand equity opportunities for cross-selling across Loto- and Europe. “In each case, the move into and the cross-marketing synergy mentioned Québec’s entire product portfolio. “Players internet gambling did not result in a material earlier. The Gagnant à vie! (Set for Life!) that play more than one type of gaming loss of retailer lottery ticket sales. PlayOLG scratch ticket is one of the most successful (casinos, lottery, bingo, poker) have a higher is engaging an entirely new demographic games on the market, and an online version average revenue per player than a player of lottery and gaming customer who seek will soon be offered. Notably, the online play who plays only one type.” a different gambling experience through will mimic the scratching effect of a paper Not surprisingly, most of Loto-Québec’s internet-connected devices.” ticket – something not done for the vast online revenue comes from casino games. majority of the lottery’s online instant games. But there is a much larger pool of lottery The brand will also be offered as a traditional Coming together in Québec players (who contribute less revenue than slot machine in the casinos, on a VLT and casino players), and officials want to convert as an online slot machine as well. “We are ttracting new types of players is more of those lottery players into lottery and trying to have a 360 degree approach to a common goal – and a common casino players. some of our big brands,” said Clement Aubin, result – of all lotteries entering the Something interesting has been learned Lottery Advisor for espacejoux.com. online space. Loto-Québec runs from the first year of online instant game When it launched online lottery sales, Amultiple forms of gaming – lotteries, casinos, sales. Initially, it was thought that games Loto-Québec involved the retailers in an bingo and video lottery terminals/gaming specialized for the online market, with unusual way, paying them a commission machines. As such, there are many tools leaderboards, levels and personalization, for every dollar spent online. If a player available to build the overall business, and for example, would be most popular. But as designates a specific retailer – about the organization is on a mission to capitalize it turns out, players seem to prefer games 30 percent of online players do – then on those tools through all available channels. with more traditional lottery themes and that retailer receives the standard retail

34 INSIGHTS March/April 2016 commission for that player’s online purchases. A Gradual Rollout in Georgia For all other online play, retailers share two percent of online sales, allocated based on The Georgia Lottery Corporation (GLC) launched internet sales in November relative retail performance. 2012. Players had been asking for an opportunity to purchase products through an It was set up this way to alleviate any internet sales channel for many, many years. We soft launched our internet sales concerns retailers had about the impact of online channel with a limited number of games – Fantasy 5, Mega Millions and Powerball. sales, but as in every other jurisdiction that has Our interest was for this to be a win-win-win: a win for our customers who’d added online sales, the retail business has not been asking for it; a win for our retailers to build sales and increase brand been negatively impacted. awareness; and a win for the HOPE Scholarship and Pre-K beneficiary programs we “The numbers are just not big enough to fund. measure any cannibalization,” said Aubin. And, as Prior to launch, we engaged with stakeholders. We listened to our retailers and other lotteries have also discovered, “if players heard their concerns before launch. We asked for input from our players through play online, they learn more about the games, pilot tests and focus groups to better understand their expectations. We shared our become more aware of the lottery, and might vision and considered their feedback before implementing this option. play more at retail.” In conjunction with the Internet sales channel, we launched the iHOPEcard, a The newly-consolidated online team at Loto- reloadable loyalty card with debit card functionality. The card provides players with Québec will continue to find ways to cross-sell a new, cashless option for purchasing lottery tickets. Additionally, it gives retailers across the organization’s entire portfolio, and a new payment method that allows for easier and faster processing of lottery additional ways to involve retailers and keep transactions. retail sales strong. “The end goal is that we are trying to be multi-channel as much as we We promoted the benefits of the iHOPEcard to retailers including: can,” said Clement, “to build bridges between all of our facilities, our retailers and our online • Easy and fast processing for lottery transactions. Lottery purchases processed operations.” through a card session will incur no interchange fees. • A fully functional debit card with a competitive fee structure including no Moving forward top-up fees and no interchange fee for lottery purchases. • A debit card that can be used for the purchase of lottery and core products hat multi-channel, or omni-channel, at any retail establishment. Non-lottery purchases will incur standard approach, is what every consumer-facing interchange fees. organization strives for. Just ask Illinois, • New functionality for favorite numbers management that eliminates manual the American trailblazer. “As the Illinois and playslip entries by retailers, minimizing incorrect number entries. TLottery prepares to transition to a new private • Prizes will be paid directly to the card resulting in easier cash management management partner in 2017, the environment of lottery transactions, meaning less cash on hand will be required for exists to expand offerings to players across validations. Illinois, who have grown to expect modern, • A new product that will align with the trends of a cashless society. omni-channel delivery methods for lottery products,” noted Rossi. Our plan was to grow our internet sales channel incrementally. We started off Indeed, consumers today expect to be able with an initial offering of three games. Then we added KENO! followed by a Diggi to do what they want, when they want to do Games (online instant games) portfolio. it, on their terms. If they can’t, they will look In December 2015, we launched a mobile app that allows players to check elsewhere. winning numbers, scan tickets, locate retailers and play online. The app has been While historically lotteries consider incredibly successful in just its first few months. With that addition, our plan now is themselves a unique product with no direct to raise awareness for our online play options with all Georgians. competitors, that’s not really true. In a Our rollout has involved a series of incremental steps with a keen eye toward consumer’s mind, other forms of gambling corporate social responsibility. Again, prior to launching internet sales, we or other forms of entertainment – especially communicated our plans and strategies with national and state problem gambling social gaming – are in many cases reasonable experts to make sure appropriate safeguards are in place. substitutes for a lottery purchase. Since day one, we’ve had responsible gaming features that include: daily, That’s why those lotteries that have made weekly and monthly spending limits; ability for players to set their own lower the online leap are happy to have done so. And spending limits; timeout sessions reminding players of their time spent on the that’s why others, if not stymied by regulatory device; self-exclusion option; and pursuing additional responsible gambling authorities, are moving in that direction. certifications. We measure results with a focus on engagement, customer service and dollars raised for education. We are pleased that sales at brick-and-mortar retail have increased by four percent since we started the internet sales distribution channel. To date the GLC has raised over $12.7 million for Georgia students through this important channel.

Contributed by the Georgia Lottery FOCUS ON: INTERNET SALES

ONLINE TRIUMPH IN MICHIGAN

The Michigan Lottery’s online games program has quickly developed into an industry success story, and everybody wins.

By Patricia McQueen

here’s no bigger advertising platform games were added to the online menu – the additional growth in online instants and the than network television during the Michigan-only games Lotto 47 and Fantasy 5, addition of the four draw-based games to the Super Bowl, which in recent years plus Mega Millions and Powerball. They were online portfolio. has taken over all the top spots on added as scheduled, one per week, and in The Michigan Lottery’s fiscal 2015 lottery Tthe list of most-watched television programs perhaps a bit of unfortunate timing, online performance was impressive all around – in America. National ads during the event sales for Powerball weren’t available until total sales were up 11.5 percent to $2.9 routinely draw acclaim, as advertisers pull after the world-record $1.6 billion jackpot on billion, commissions to retailers were up out all the stops to reach the immense January 13. eight percent to $203.6 million, and net audience. But the Super Bowl’s appeal revenue to the School Aid Fund was up 7.1 reaches down to jurisdictional levels, and it percent to a record $795.5 million. was on that stage that the Michigan Lottery “Our results speak for themselves,” chose to celebrate its successful online said Bowen. “By any standard performance games program, placing television ads during measures, we are performing very well, the game in several Michigan markets. and excellent performance helps quiet any “The reason for offering the online potential critics. We are still on track to meet games to players is that we think it’s a our goal of providing an additional $480 good thing for players, for the Lottery and million to the School Aid Fund from online for our beneficiary, the state School Aid games over the first eight years of offering Fund. We wanted to showcase the online them to players.” games platform and chose the biggest TV That extra revenue to education was event of the year to launch that effort,” said one of the reasons the various industry Commissioner M. Scott Bowen. The Super stakeholders in Michigan accepted, and in Bowl campaign was a big way to get the most cases welcomed, the Lottery’s venture message out after the online portfolio was into internet sales. Even with higher prize expanded to include selected draw games For their first full year of sales – with payouts and additional costs of the online in January. “From the numbers we’ve seen, instant games and instant keno only – in operation, “the Michigan Lottery is making our analysis is that we have had the most fiscal 2015 (ending September 30, 2015) a significant contribution to the School Aid successful online game launch in North online games brought in $146.2 million Fund with its online games right now,” said America.” in sales and paid $127.7 million in prizes, Doug Pollard, Co-Chief Executive Officer of Online games made their debut in resulting in net win of $18.5 million. In just NeoPollard, which runs the Lottery’s online Michigan in August 2014 with a variety of one year, internet sales volume vaulted gaming system. “That is causing other instant-win products, including single games to five percent of total sales, and Bowen lotteries to sit up and take notice, and if and and extended play games, plus instant expects FY16 online sales to exceed $300 when they get pressure from their governors keno. In January, four of the Lottery’s draw million, or 10 percent of total sales, with to raise more revenue for good causes, this is

36 INSIGHTS March/April 2016 an avenue they should explore. It’s no longer sales, which is that online games actually Card at least once to fund their accounts. something that can be ignored.” increase awareness of and interest in all Through early March, about six percent of Although it may seem so, internet lottery games.” total deposits made into player accounts sales success in Michigan did not happen have come from the cards. overnight. In fact, it is the culmination of Retail involvement Bowen expects those numbers to years of strategy and preparation, as players grow considerably with the April 1 debut were introduced long ago to play-for-fun ertainly the Michigan Lottery is of terminal-printed Online Game Cards. online games and online second chance doing its part to underscore the “Retailers only have so much display space,” opportunities for added value. That also importance of retailers to its he said, and if the paper cards weren’t big helped retailers get used the idea of lottery business success. The most obvious sellers in a store, the retailers wouldn’t stock players thinking about lottery on every Cthing was providing a way for retailers to the cards. Now, any retailer can offer them platform – in their stores of course, but earn commissions on internet sales through on demand. The paper Online Game Cards also on home computers and, especially, on the introduction of Online Game Cards. still will be offered to players. mobile devices. Initially launched in December 2014 as Another nod to the importance of “Our focus is on developing omni-channel a paper card similar to an instant ticket, retailers is the Lottery’s commitment to players,” said Bowen, the players who will players can buy these cards at retail and use exclude Daily 3 and Daily 4 games from the play online, in the stores, on their devices the printed codes to add the funds to their online offerings. Those two daily numbers – wherever it is convenient for them at any online accounts. Retailers get their full six games account for more than 25 percent of given time. And by having players used to percent sales commission on every $20 gift annual sales, and those who play them often thinking about lottery wherever they are, card sold, and those sales also help them visit stores once or twice a day. “Obviously the retailers themselves benefit, despite the qualify for incentives and bonuses. Players the retailers value those folks because they misconception around the country that retail also get a bonus – $25 worth of game play end up buying other products in addition to sales will plummet if a lottery offers online for their $20, available on up to five Online lottery tickets, so we want to help maintain sales. “We’re starting to see what other Game Card purchases per week. that store traffic,” added Bowen. jurisdictions have seen, primarily in Europe Since their inception, 25 percent of The Lottery is also big on promotions where there is a long history of internet registered players have used an Online Game that help drive traffic to retailers. For some

450,000 1 BILLION points of global 20 years consumers distribution of innovation

$28 BILLION 186 annual transaction 500+ global patents volume brand partners

incomm.com INSIGHTS March/April 2016 37 FOCUS ON: INTERNET SALES

% Increase, Fiscal 2014 % of Total Fiscal 2015 % of Total FY14 to FY15 Sales: Instants and pulltabs $945,516,621 36.4% $1,046,072,822 36.1% 10.6% Draw games 1,099,233,262 42.3% 1,126,356,217 38.8% 2.5% Club Keno 551,104,811 21.2% 580,971,186 20.0% 5.4%

Online games 3,914,115 0.2% 146,189,761 5.0% 3,634.9%

Total Sales $2,599,768,809 100.0% $2,899,589,986 100.0% 11.5%

Retailer commissions $188,500,000 $203,600,000 8.0%

Net to School Aid Fund $742,907,314 $795,501,693 7.1%

Chart Notes: Online games during both fiscal years include a variety of instant games and instant keno. Online sales began in August 2014; the fiscal year runs October 1 - September 30.

of its instant games, both online and Knowing the player traditional printed, codes provided on non-winning games allow the player peaking of more information, to get additional play value online and online offerings tell a lottery the chance to win coupons to redeem more about their players than at retail. Not only do these promotions ever before. Traditionally, lottery help the player by extending the Shas been an anonymous event by entertainment experience as well as anonymous players for anyone but the offering tangible dollar value, they biggest winners. Surveys help, but are help drive traffic back to the stores for heavily biased towards what players additional purchases and the resulting want a lottery to know. commission opportunities for retailers. “I think it’s actually one of our weak There’s also careful analysis of how points as an industry that we don’t different instant games perform online. really know much about what’s actually The Lottery can track the appeal of each happening with our players,” said game, identify the types of consumers Pollard. “I think that’s a very vulnerable who like different games, and more place to be.” Certainly lottery players efficiently define promotions and clubs have come a long way and help purchase advertising. And if there is a lotteries understand a segment of their really strong game online, it may end player base, but online lottery provides up as a paper scratch ticket as well, to even deeper detail about players. bring that popularity and positive player No matter the source of customer perception into the stores. information, however, lotteries need to “All of this has a positive impact work more to actually take advantage of on our entire business. The more that information. “You want that data for information you have, the more you what you can learn from it,” he added. know about your customers, the better “We’re just scratching the surface of off you are,” emphasized Bowen. that.”

38 INSIGHTS March/April 2016 In Michigan, 29,000 new online players offers to those groups most likely to be More than 20 new instant-win games are registered in February, likely a benefit of the interested in those offers. They can use scheduled to launch this year, with new Super Bowl ad and three weeks of following different methods of advertising to reach games every two or three weeks to keep the advertisements. By early March there were a players of specific games. “It really allows us online content new and exciting. total of 276,000 registered players, up from to offer a better experience for players,” said Recognizing the importance of mobile 108,000 at the same time last year. They are Bowen. access, the Lottery is also working on major split about equally between genders, with a renovations of its mobile app and an all-new slight edge to female at 51 percent. Almost a Looking ahead app optimized for tablets. And its Players third of them (31 percent) are under age 35 Club rewards program continues to evolve and 43 percent are between the ages of 36 lthough Michigan’s online channel with the goal of creating more engaged and and 55. Nearly half of the online game play missed out on the Powerball frenzy active players through both retail and online is done via mobile devices, and the average in January, odds are that there will channels. age of those users is 38. Desktop users have be another tremendous jackpot “Our whole focus is to offer players as an average age of 45. Surveys have shown Arun before too long. That’s where the ability many options as we can and to make the that the average age of a retail lottery player to sell jackpot games online really shines – Michigan Lottery as convenient as possible in Michigan is 50. Clearly, the internet sales picking up new players who don’t want to for players,” said Bowen. Players are option is bringing in a new audience and stand in line. responding, and everybody wins. broadening the player base. But of course lotteries can’t rely on And by knowing more about who is jackpots. To meet its goal of more than playing what, the Michigan Lottery can $300 million in online sales this fiscal year, better serve its customers. While officials Michigan has a number of initiatives going. keep personal information private, they Already mentioned were the addition can analyze aggregate data to send tailored of the four draw-based games and the marketing communications and promotional new terminal-printed Online Game Card.

INSIGHTS March/April 2016 39 INSIGHTS HOLIDAY TICKET REVIEW 2015 EDITION The November/December issue of Insights featured a gallery of holiday tickets from a number of North American lotteries. In this regular follow-up feature, we asked those participating lotteries to wrap up their experiences during the holiday season – what worked, what didn’t work, and how they will plan for holiday 2016. Their responses follow, as compiled by Patricia McQueen in early March.

40 INSIGHTS March/April 2016 California Lottery California’s holiday lineup included four games: one each at $1, $2, $5 and $10.

Most successful game(s): Overall, our holiday games performed almost equally well. Both the $1 and $2 holiday tickets started slower in sales than last year’s holiday games. However, they showed strongest gains the last week of December. We believe these tickets are affordable gift giving options, and they strongly supported the advertising campaign. Therefore, we will continue to produce these games in the future. Our $10 holiday game continued to exceed weekly goals by the end of the season.

General holiday strategies: In building upon the success of the last two years’ holiday campaigns, the California Lottery continued its focus on the “Give the Gift of a Golden Greeting” marketing strategy. In March 2015, we conducted a research study focusing on holiday purchasing behavior and Scratchers as gifts. We found our players enjoy giving Scratchers because they provide hope, excitement, value and originality. We also discovered players would appreciate a bigger, more distinct “to/from” label on our holiday tickets. In recent years we’ve applied the “to/from” label to our $1 price point only. This year we made sure the label was more prominent on the $1 game and added it to the $2 and $5 price points.

On November 18, 2015 we launched our holiday Scratchers. $1 Holiday Wishes had four different scenes, displaying an extra-large gift tag to accentuate the tradition of giving. For the $2 price point, we added a “to/from” label, creating The Perfect Gift with an easy gift-giving opportunity. This $2 ticket featured a festive stocking graphic full of 2015 holiday Scratchers. Next up was our $5 Holiday Surprise, featuring a folding element revealing a “to/from” label for gift giving. And finally, $10 Silver & Gold was launched as a more traditional Scratchers ticket. It did not feature holiday graphics, but the graphics complemented the line-up nicely.

In 2013-2014, the Golden Greeting envelope was a key player in our advertising campaign, this year the envelope was transformed into a more upscale and glamorous folding card, printed with glitter on the front, and an inside pocket to hold Scratchers. The holiday Scratchers TV advertising campaign ran from November 26 through December 24, 2015. All holiday Scratchers were featured in the campaign, and paired nicely with the free Golden Greeting Card.

Major lessons learned in 2015: Our $5 holiday game faced some challenges. We were left wondering… did our players notice the gift giving option, since the “to/from” label is printed on the back with the folding instructions? Or maybe the $5 price point isn’t appealing as a gift? Our plan is to research new concepts for the $5 ticket before deciding to launch this price point during the 2016 holidays.

Colorado Lottery Colorado’s holiday lineup included five games: one each at $1, $2, $3, $5 and $50.

Most successful game(s): Our $5 game Holiday Sparkle was the best performing game in our holiday mix. The game sold a little more than 98 percent of available inventory, and sold out prior to December 25.

General holiday strategies: The has been pretty consistent over the past few years when it comes to holiday strategy. The games usually launch around the second to last week of October (October 19 this past year) and consist of four price points $1, $2, $3 and $5. However in FY16 we introduced a $50 price point, and that game was launched with the holiday games. The $50 game features three unique pulses that change over the life of the game. The first pulse had a holiday theme so theoretically that game was considered part of the holiday lineup. As a result, for the first time ever, we posted weekly Scratch sales above $10 million (week ending October 24 Scratch sales totaled $10.9 million). Similar to other years, we supported the holiday lineup with a full advertising/marketing campaign including television, radio, Internet, out-of-home and point of sale at retail. Combined, the holiday lineup sold approximately 93 percent of available inventory prior to December 25.

Major lessons learned in 2015: We will continue to implement a similar holiday game strategy for FY17. Current plans are to launch the same prices points ($50 not included) with similar inventory amounts. The advertising and marketing support will most likely remain the same as well.

INSIGHTS MArch/April 2016 41 Connecticut’s holiday lineup included four games: one each at $1, $2, $5 and $10.

Most successful game(s): In terms of sell-out, the our Holiday Cash ($5) game reached that criteria mark first. The $5 is a great holiday gift-giving price point and our customers responded well to it.

General holiday strategies: Consistent with our previous holiday programs, holiday themed scratch tickets were delivered to the marketplace by the 26th of October, with the exception of our $10 game that launched on the 19th. Ticket quantities for each of the four games were set at 1,000,000 (1,400,000 for the $1 ticket), which is smaller than typical game runs; however, this supported our desire to have holiday games available while maximizing the potential for sell-out by the end of the holiday season.

Ticket imagery was traditional in terms of colors and styling. The $10 game (Just for You) had a dual purpose in that it was both a holiday game and also promotable for Valentine’s Day sales. Printing the ticket on foil paper added to its elegant look and desirability as a property for gift- giving.

Distribution of holiday point-of-sale (POS) has been simplified for the Connecticut Lottery’s field teams by following a plan-o-gram. This year POS was limited to in-store display monitor signage, wreath window cling, dispenser topper and gift envelopes. We eliminated several pieces of POS from the previous year: a poster, counter mat insert, wobbler and counter card.

Marketing support included radio, TV, digital and vinyl billboards, bus shelter and bus signage, gas pump toppers, web banners, radio promotions and social media.

A specialty on-counter dispenser holding four games vertically showcased the four holiday products. Retailers used the towers to keep lottery products top-of-mind with consumers.

Major lessons learned in 2015: Results for the holiday 2015 reached record levels and we expect to remain consistent with the practices and products from this year.

DC Lottery DC’s holiday lineup included four games: one each at $1, $2, $5 and $10.

Most successful game(s): For the holiday season we launched a Betty Boop family of games at each price point. They all sold at the same rate.

General holiday strategies: Betty Boop is our strongest licensed brand and since our holiday tickets don’t do as well as those in other markets, we decided to launch a Boop family to help drive sales.

Major lessons learned in 2015: We always launch our holiday tickets in November but we may launch in October next year to help sell out inventory by the end of January.

42 INSIGHTS March/April 2016 Florida’s holiday lineup included four games: one each at $1, $2, $5 and $10.

Most successful game(s): Our most successful holiday game of 2015 was our $5 offering, $500,000 Holiday Gifts. In 2014, the $5 price point saw a $13.7 million lift in sales compared to 2013 through 16 weeks. In 2015 we saw an increase over 2014 of more than $18.5 million through the same period. In total, those added dollars translate into an incredible 156 percent sales increase over our $5 holiday game from 2013. We feel that several factors played a significant role in the success of the $5 price point, including: a larger than typical top prize offering, an ability to stay in stock through the holidays with added inventory supply, visually appealing artwork and a strong/cohesive advertising campaign that saturated the retailer market with product presence during the holidays.

General holiday strategies: We launched our Holiday Gifts family at four price points to appeal to a wide demographic and suit every budget. We promoted the entire set of games as the perfect gift idea by themselves and as a gift topper. The $1 and $2 games offer meaningful prizes and made great stocking stuffers or last-minute presents, as evident by the large spike in sales at these price points just before Christmas. At the $1 and $2 price points, a lot of new players are attracted to and may be trying our games for the first time after receiving them from a friend or family member as a gift. The $5 and $10 games offer life-changing prizes that are affordable for light players but also appeal to core players.

Furthermore, we’ve experienced tremendous success with our game families over the last several fiscal years and felt that the concept would naturally translate into the holiday season. In Florida, Scratch-Off game family sales averaged 107 percent above non-family game sales through the first 26 weeks of the fiscal year. We accomplish approximately 17 percent of our total annual instant sales in the nine weeks between the end of October and January 1. More importantly, this period marks a ramp-up in sales that provides a nice boost leading into our peak sales period of the fiscal year during the third quarter. In late October, we see a nice lift from the holiday game launch that tends to dip around week 22, which we attribute to consumer focus on holiday shopping. Our biggest increase during the holiday season occurs around week 25, or the week of Christmas into the New Year, when Scratch-Off games become the perfect last minute gift.

In consideration of a game family, we also looked at sales performance in other states that launched a holiday family following a year that they did not and noticed a significant increase in performance. Our goal was to create a cohesive and recognizable campaign that could penetrate through the clutter of the holiday season and promote the games as a purchase ‘set.’ Typically, we offer multiple games at the $1 and $2 price points during the holiday period and see these games almost equally split sales with one another. By taking a single game approach at these price points in 2015, we were able to create much more robust prize structures with richer callouts for more attractive games. Moreover, the proven strength of game families in Florida allows us to significantly increase order quantities across the board. Increasing our typical order quantities through the holidays prevented out-of-stock situations at both our instant ticket warehouse and retail.

Major lessons learned in 2015: Our family of games strategy proved to be a prudent approach as we saw a nearly 18 percent lift in holiday Scratch-Off sales compared to 2014. We also confirmed that a family of holiday games not only appeals to new/infrequent players, but it continues to resonate with our core players as evident by the continued sales success of these games well after January 1, 2016. History has shown that the sharpest decline in the holiday game sales occur after the New Year. We noted a much flatter curve with our holiday games after January 1, 2016, with the $10 and $5 games continuing to contribute more than $1 million in sales each through the middle of the month. This is clearly a result of the larger than typical top prize offering.

Two of the four games were traditional holiday colors (red and green), while the $1 and $2 tickets were purple and blue. Through player panel surveys, we learned that many players found the lower price points visually unappealing. We learned that art at the $1 and $2 price points were not as favored by consumers because they weren’t reminiscent of traditional holiday coloring and feel.

We also learned that while players were attracted to our higher prize callouts at the lower price points, there was still an incredible demand for variety during the holidays. Our December launch of a $2 bridge game, a product that translates well during the holidays and is also intended to sell well after Christmas and New Year, far exceeded sales projections and required a re-order only two and a half weeks after launch. We learned that players were utilizing that game as a second holiday stocking stuffer which explained the incredible increase in sales for that game compared to the previous year. In 2016 we plan to return with a holiday family and the December game launch will reflect higher initial ticket order quantities to meet the demand we saw in 2015.

INSIGHTS March/April 2016 43 Georgia Lottery Georgia’s holiday lineup included six games: one each at $1, $2, $3, $5, $10 and $20.

Most successful game(s): For our holiday season this fiscal year we launched a holiday game for almost every price point. While all of our tickets performed well when benchmarked against their respective price points, three stood out as especially successful: the $1 Holiday Treasures, which was a multi-scene offering; the $3 Sparkling Surprise, which was a new play style for our players where they had to match coordinates and uncover three symbols of a kind; and the $5 Merry Money, which all sold out either right before the holidays or after the new year, which was perfect timing from a life cycle standpoint. Additionally, we supplemented the holiday game sales with a “New Year’s” scratchers product line called Shimmering Cash, which launched in the November/December time frame in order to bolster traditional holiday sales.

General holiday strategies: We reintroduced two Jingle Jumbo Bucks holiday products at the $10 and $20 price points as done in prior years. We have learned that the holiday season has become synonymous with the Jumbo Bucks brand here in Georgia, and so we made sure we had such products available to meet those player needs. Our goal was to sell out of the holiday products by the late winter months, and we mostly have accomplished that. Additionally, we advertised the holiday products as part of a larger brand campaign on TV, radio and traditional POP at retail.

Major lessons learned in 2015: When you reintroduce similar products, you must add value to the offering, such as a different price point, prize offerings and an enhanced look and feel with added printing options and additional play action for players.

Hoosier Lottery Hoosier’s holiday lineup included five games: one each at $1, $2, $3, $5, and $10.

Most successful game(s): From a product sales perspective all five of our holiday themed Scratch-offs were a success. However, from a marketing perspective $2 Ugly Sweater certainly broke through the clutter of the holiday landscape in mass media, retail and social channels.

General holiday strategies: Similar to holiday 2014, in 2015 we launched our holiday themed Scratch-offs across October and November. The current player appeal $3 and $10 Scratch-offs launched in October. In November, the $5 current player holiday game launched along with the lapsed player appeal $1 and $2 games. Similar to 2014, we offered a multi-game second chance promotion to generate excitement throughout the holiday season on all five holiday Scratch-offs. This year though, we upped the ante and added an interactive match three game component to the entry process. Players responded well to this, however we did not see consistent play of the game through the promotion. Our marketing campaign kicked off fully with the November launch including mass media, in-store, out of home and digital marketing. To ensure better visibility at retail, retailers were encouraged to face holiday Scratch-offs in a promotional four bin tower.

Major lessons learned in 2015: We achieved our best holiday sales results in documented history. We will follow this same strategy in 2016 with a mix of current and lapsed player themed holiday Scratch-offs launched across October and November and support in a similar fashion with marketing and merchandising.

44 INSIGHTS March/April 2016 Iowa’s holiday lineup included 11 games: two each at $1, $3, $5 and $10, and three at $2.

Most successful game(s): Our crossword games continue to be our strongest selling holiday games at the $5 and $3 price points followed by the $10 non-crossword holiday games. Overall, sales were up 7.6 percent for the sales quarter when compared to same sales quarter prior fiscal year. All price points saw a sales increase except for $5 category which saw a slight dip of 2.5 percent. When comparing 10 holiday games delivered in the previous year to 11 holiday games delivered in the second quarter of fiscal year 2016, holiday game deliveries were up 17.5 percent for the quarter.

General holiday strategies: We try to choose tickets that appeal to a broad variety of players from a price, graphic design, play style and payout standpoint. The goal is always to sell through as many tickets as possible and minimize returns. The secondary goal is to continue to engage our VIP Club members by offering them “Play It Again” opportunities to win cash and prizes.

Each year we support our holiday tickets with a significant promotion and advertising campaign built around a unique theme. This year our promotion “Holiday Hoopla” appealed to a more targeted audience due to the unique prize of NCAA Basketball Tournament VIP Suite tickets or cash. We found that while the NCAA tickets were popular and highly coveted (and nearly impossible to get elsewhere) the entries ran approximately 2:1 in favor of cash. As illustrated above the ticket sales and promotion were very successful.

Major lessons learned in 2015: We have a method in place that seems to resonate well with our players as our holiday tickets and promotions are highly successful, but we know no matter what – Cash is King!

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INSIGHTS March/April 2016 45 Idaho’s holiday lineup included five games: one each at $1, $2, $3, $5 and $20.

Most successful game(s): We offered players five different games that made great gifts and stocking stuffers. They included the $1 Freezin’ Greetings, $2 Mooseletoe Doubler, $3 Cranberry Cashword, $5 Holiday Wishes and the $20 Jingle Bell Jackpot. Due to their holiday themes, all games were issued to the public with a limited print run.

All five games have performed strongly during FY16 and remained popular well after the holiday season ended. Four of the five games remained on the market as of mid-March, but are over at least 92 percent sold and close to selling out. Cranberry Cashword, which claimed out after 22 weeks and 85 percent sold, was the most popular game this year. In addition to the seasonal theme, the game also included two second chance opportunities for non-winning tickets: an online extended play version for a chance to win $300 in Cashword tickets and separate entry into our $5,000 Holiday Shopping Spree promotion.

For the $20 Jingle Bell Jackpot, we tried a new approach with the top sell our holiday-themed games, as well as all our other games. The prize. Instead of offering a traditional $200,000 top prize, we offered award-winning kiosk was operated by the our Event Team – the Wooh 10 top prizes of $20,000. This strategy worked. Jingle Bell Jackpot has Crew – and sold over $40,000 from November 1 through December reached the same level of sales, 98 percent, in two less months than 31, 2015. last year’s $20 offering. Overall, the second chance, non-winning participation rate reach General holiday strategies: was 6.15 percent of all non-winning tickets sold, representing nearly In 2014, our most popular game, Candy Cane Cashword, sold out 93,000 entries. This was an increase of 3.5 percent over the previous prior to Christmas. Three other games ended by mid-February. Our promotion the year before. Of those entries, nearly 29 percent of all $20 game lasted on the market until May. Evaluating ticket quantities entries were from the $3 Cranberry Cashword. is the biggest challenge for the holiday campaign. This year we entered into the holiday season with a goal of reaching $6 million in Major lessons learned in 2015: scratch sales during the 10 week run-up to New Year’s. We achieved a We took the success from the holiday campaign in 2014 and applied $5.8 million mark during this time. that to the current year’s scratch offerings. Although all of the games have been available longer than our goal time period, the longevity We promoted all five games with the tag line “Make your Holiday of each game this year has provided a unique perspective to our Merry and Bright” with Scratch Games from the Idaho Lottery. holiday games. None of them will be on the market as long as last Advertising support included POS, window clings, outdoor billboards, year’s $20 ticket. And while they have not sold through as quickly as TV, radio, social media and owned channels. the previous year, they have generated more sales, with holiday game ticket sales for all products up 24.88 percent. Another goal for 2015 was to sell out or claim out the games as close to the end of January 2016 as possible. To accomplish this, we Holiday Shopping Spree was a repeat promotion from the 2104 produced all five games on reduced print runs, and launched them by holiday campaign. The difference this year was we specifically mid-October. designated which shopping area players could use. We also provided travel expenses for players to visit Boise. Entries increased and There were two $5,000 Holiday Shopping Sprees offered for second- the feedback we received was positive. With this in mind, we are chance entrants on all 2015 holiday-themed games. The shopping considering a similar promotion next year, but extending it regionally spree was specific to the Boise Towne Square, a shopping mall in to other shopping areas of our geographically diverse state. Idaho’s capital. The spree came with a free hotel stay at a nearby Candlewood Inn and $300 travel money. The success of the Holiday Shopping Spree promotion really drove holiday ticket sales across all price points. Overall sales were The entry time frame on game tickets was from October 5, 2015 significantly higher than the previous year for the $20 Jingle Bell through January 19, 2016, with non-winning tickets eligible for Jackpot (up 16.19 percent), $5 Holiday Wishes (up 38.54 percent), entry through the lottery’s website or via tele-entry. There were two $3 Cranberry Cashword (up 49.37 percent), and the $1 Freezin’ draws – one two weeks prior to Christmas and the second after the Greetings (up 11.29 percent). The $2 game, Mooseltoe Doubler, saw promotion ended, ensuring that every player’s holiday season was relatively stable sales equal to the previous year. merry and bright. For next year, the Idaho Lottery may look at changing the Holiday The agreement with Boise Towne Square also included the Second Chance prize, we will definitely keep our mall kiosk space, and installation of a temporary lottery kiosk in the center of the mall to again re-examine ticket quantities of holiday-themed games.

46 INSIGHTS March/April 2016 Kansas’ holiday lineup included three games: one each at $1, $2 and $5.

Most successful game(s): The holiday tickets that do the best are the ones with which we use Scratch FX or holographic paper.

General holiday strategies: This season we went with a mini family of holiday tickets that used Scratch FX: $1 Holiday Magic, $2 Holiday Wishes and $5 Holiday Spectacular. They were black tickets with colored holographic paper. We sold them from October 1 – January 31. Our $1 and $2 tickets ended due to top prizes being claimed. Our $5 ticket sold 85 percent of the game and had one top prize remaining.

Major lessons learned in 2015: We think we will do another mini family. We may also do a Holiday Super Ticket at the $10 price point.

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INSIGHTS March/April 2016 47 Kentucky Lottery Kentucky’s holiday lineup included three games: one each at $1, $2 and $5.

Most successful game(s): Our $5 game Winter Winnings was the most successful of the three holiday games launched this year. It was printed on holographic paper which gave it a glistening, icy effect so it was very appealing to the eye and really popped in dispensers. The game sold out in only 12 weeks with sales of over $7.3 million. Our $1 game Holiday Cash also sold out after only 12 weeks in the market with sales exceeding $2.3 million, so that would be our second best game. We attribute that to gift-giving and increased trial play due to the seasonality.

General holiday strategies: Generally, we don’t produce a big variety of holiday games due to the limited sales period and this year was no different. We promoted the games through in-store POS, including gift envelopes for scratch-off tickets and a direct mail piece with a product-specific offer for holiday games. The coupon offer was also sent to our Players Fun Club members via an e-blast.

Major lessons learned in 2015: Perhaps increase the print quantities slightly to get a few more weeks of sales from the games.

Louisiana Lottery Louisiana’s holiday lineup included four games: two at $1 and one each at $2 and $5

Most successful game(s): Our holiday scratch-off games always index well. Looking back over the last five years, the $5 price point has seen the most improvement, growing from an index of 86 in 2010 to 126 in 2015. This year’s $5 holiday game, Happy Holidays, featured a rich, classic design highlighted by gold metallic ink.

General holiday strategies: In 2015, we increased the quantity of our $2 game so that it would be available through the holidays, as last year’s version closed well before Christmas. This year, our $2 game Holiday Double Match claimed out perfectly right on Christmas Eve! Creatively, our $1 game Perfect Gift became the focal theme of our marketing campaign, which poked fun at some “less than perfect” zany holiday gifts with the tagline: “Let’s face it, we’ve all gotten a pack of socks before.” Radio listener call-in promotions as well as Facebook and player’s club promotions encouraged participants to share their stories of the wackiest gift they’d ever received for the chance to win a holiday prize package during December.

Major lessons learned in 2015: We usually launch our holiday games in October, but this year we decided to wait until right after Halloween. Although a shorter sales period, this worked for us as the games were top of mind for retailers at that point and were placed into the dispensers much more quickly. We will duplicate this launch strategy for next year.

48 INSIGHTS March/April 2016 Maryland’s holiday lineup included five games: one each at $1, $2, $3, $5 and $20.

Most successful game(s): We had extremely successful tickets at all price points during the FY16 holiday season; each of these tickets outperformed last year’s program. From a sales perspective, one standout ticket was our $5 Holiday Lucky Times 10, which was nearly 90 percent sold within 10 weeks and indexed at 148. This ticket had performed well in other similar jurisdictions, and its success was most likely a result of the cash theme and multiplier, which are both highly appealing to our core players.

Maryland is traditionally a bingo state, so we were also pleasantly surprised by the success of our $3 Tic Tac Dough game which outperformed the previous year’s holiday bingo ticket. We took a little bit of a risk here, and it paid off. The success of this game can be attributed to the fact that our players are developing an appetite for other types of extended-play games beyond bingo and crossword.

General holiday strategies: Our tickets had whimsical themes at the lower price points, $1 Penguin Doubler and $2 Cookies and Cash, while the $5 Holiday Lucky Times 10 and $10 Let It Snow Tripler were cash focused with multipliers to appeal to core players as well as those seeking holiday tickets. Our $10 Let It Snow Tripler was printed on Pollard Banknote’s Scratch FX, giving players a little more perceived value for their spend.

Quantities were planned to last through the holidays, with some lasting longer. In general, we have remaining inventory of the $3 and $10 tickets in early February that still produce respectable sales. We keep these price points winter themed and therefore relevant beyond the traditional holiday season.

We did implement one change for the FY16 holiday program. In an effort to give our September launches a little more time to sell through and release our holiday products closer to the season, we utilized a different strategy than in previous years. Instead of releasing our holiday games in mid-October, we launched two weeks later than initially planned. The later launch was successful for us, as we achieved greater sales for each game in a shorter period of time. This is a strategy we will use again in the upcoming fiscal year.

We ran a second-chance contest that featured four drawings for Warehouse Dash Shopping Sprees. In addition, the contest offered more than 100 cash prizes totaling $300,000. The second-chance contest was supported by internal assets as well as printed point of sale, radio and television advertising. We even created a special gift envelope designed for retailers to distribute to players who purchased multiple tickets as gifts.

The Warehouse Dash contest was a success, receiving more than 860,000 ticket entries, a 29 percent increase from the previous year’s holiday program. In addition, we saw 8,412 more unique second-chance participants when compared to FY15, with the largest increases in ticket entries coming from the $1 and $5 price points.

Major lessons learned in 2015: First, there is an appetite for other types of extended-play games beyond bingo and crossword as was demonstrated by the popularity of our Tic Tac Dough game. Second, launching a little closer to the actual holiday season allows us to maximize our sales in a shorter period of time.

INSIGHTS March/April 2016 49 Missouri Lottery Missouri’s holiday lineup included six games: one each at $1, $2, $3, $5, $10 and $20.

Most successful game(s): Our $10 game, Garland Riches, was one of our highest-selling holiday games in our 30-year history. We think the design and play action really appealed to our players.

General holiday strategies: Our strategy was to deliver a variety of popular holiday game themes, play actions and price points supported by TV, radio, social media and our holiday promotion, Holiday Chill Out. The promotion was geared towards the theme of living well, being happy and relaxation, and it offered players the choice of world-class retreats to Mexico, Greece or California, in addition to other relaxation-themed prizes.

Major lessons learned in 2015: For the first time, we offered a $20 holiday game, and we also experienced our highest holiday game sales ever. We plan to offer a $20 game in our 2016 holiday game mix as well.

Nebraska Lottery Nebraska’s holiday lineup included five games: one each at $1, $2, $3, $5 and $10.

Most successful game(s): The $3 Mrs. Claus’ Crossword game was the most successful. Our $3 product line is dominated by Bonus Crossword, our most-popular Scratch game, and adding a second $3 crossword was a concern. Would players reject it and stick with the regular crossword? Mrs. Claus’ Crossword has a lower top prize ($3,333) compared to the $35,000 top prize for Bonus Crossword, but players soon realized that there were a total of 30 top prizes to win in the game.

In the end, adding Mrs. Claus’ Crossword was a great complement to our existing crossword game. Crossword-only sales for the first 18 weeks of the game were 26 percent higher compared to the previous year when only one crossword game was on sale. Our experience with running simultaneous crossword games will have benefits outside of the holiday season.

General holiday strategies: Each holiday game was a new game design unique from any previous holiday game. We did an initial distribution of the $1 Santa’s Little Secrets, $2 Winnerscape, $3 Mrs. Claus’ Crossword, $5 Reindeer Game and $10 Black Ice holiday games the first week of October 2015 to assure timely placement and retail penetration. As in past years, we tied the holiday games to a second-chance contest that offered a $10,000, $5,000 or $2,500 travel gift card so players could choose the vacation of their dreams. Over 71,494 entries were received in the contest.

We hoped to sell out of the holiday games by or around the end of the promotion on January 17, 2016. Santa’s Little Secrets and Black Ice sold out and were closed by the end of the promotion. Winnerscape and Mrs. Claus’ Crossword sold out of our warehouse before the promotion ended, with the only inventory left on sale at retail. Inventory for both games has been depleted with one top prize for each game yet to be claimed as of early March. Reindeer Game has only one top prize remaining and is nearly out of warehouse inventory.

Major lessons learned in 2015: We learned that we could offer a holiday crossword game in addition to our core crossword to increase our overall crossword sales – a strategy we will look at for the next holiday season as well as other times of the year. And adding a $10 holiday game with a general winter theme was also very successful. The $10 Black Ice ticket was easy for new players to understand, had lower overall odds of winning, and offered 20 top prizes of $20,000, which made it quite popular.

50 INSIGHTS March/April 2016 New Hampshire’s holiday lineup included four games: two at $1 and one each at $2 and $5

Most successful game(s): $1 Holiday Hundreds was our highest indexing holiday scratch ticket offered to date. The ticket was bit quirky (specific to the dancing penguin graphics found on it) which garnered player’s attention and we took a risk with the game. It played up the whimsy of the Claymation feel, similar to last year’s $1 Frosty Fun. The game was limitedly supported with a PAD (player advertising display) slide which was clear, concise advertising of the game, and through social media posts.

General holiday strategies: This year’s strategy was to push the envelope a bit more than the previous holiday season by offering a combination of non-traditional holiday games versus traditional holiday games, just to see what the player’s reaction would be to the mix via sales. Our goal is to sell out shortly after the holiday period ends and for the most part, those games were out of our warehouse by the holiday. In the end, the non-traditional games ($1 Holiday Hundreds and $2 Ugly Sweater Tripler) sold better than the traditional games ($1 Winner Green and $5 Merry Money X10).

Major lessons learned in 2015: For Holiday 2016, New Hampshire will be pushing the envelope a bit further. The feeling is that the more quirky the scratch game is, the less advertising support is needed (during the time of year when everyone’s senses are overloaded by such) as the games really sell themselves.

INSIGHTS March/April 2016 51 New Mexico’s holiday lineup included six games: two at $3 and one each at $1, $2, $5 and $10.

Most successful game(s): Our holiday games offered players a big variety of play styles and looks this year. We feel the games complemented each other and gave players many options. Typically, we launch three to four holiday games, but this year we launched six! The $1 game, Holiday Surprise Doubler, was a simple Match 3 with a Doubler feature. The $2 game, Holiday Gold 5X, was a multiplier. The $3 game, Holiday Magic, offered an extended play style using coordinates to uncover holiday/winter symbols. Five-dollar Ho Ho Ho 10X featured a multiplier. And $10 Seasons Greetings offered players the chance to win a top prize of $100,000. Additionally, to round out the game mix, we added $3 Frosty Crossword.

General holiday strategies: New Mexico Lottery holiday Scratchers launched on October 4, 2015 as October “Super Tuesday” new games. Because the games launched before Halloween (and before the holiday shopping season kicked off), we ran an initial POS campaign that stated ‘Tis The Season for Scratchers.’ The tickets were displayed on a blue snowflake background with a bright red satin ribbon that complemented and stood out beside the red Powerball campaign POS.

We wanted to promote the game launch on television, but we thought it was a bit too early for consumers to see a holiday ad. So, we made the most of football season and our NFL TV package to promote the tickets within a football framework.

In November, we began a fresh new ad campaign themed “Scratchers Make Perfect Gifts” that featured tickets on a red background. We also designed an innovative gold cling ribbon that was placed over the quiet space on the Powerball POS and stated “Tickets Make Perfect Gifts.” Then, right before Thanksgiving, we released our brand new radio and holiday TV spots to complement the theme.

Holiday Scratcher advertising included TV, radio, POS, radio promotions, wrapped busses, digital outdoor, static outdoor, digital ads (desktop and mobile), in-store radio and Player Advertising Display spots in stores. The digital /mobile campaign was quite innovative, in that we promoted the games with a set of AB tested ads that rewarded click-thrus with 10 holiday tips. To our surprise (and delight), the ads that featured the Scratchers received more click-thrus than the Christmas tree ad. The digital ads (both desktop and mobile) linked to a page on the lottery website that promoted both the holiday games and fun holiday tips selected by our staff.

To boost awareness right before Christmas, holiday radio promotions ran December 7 – 18, 2015, on 30 separate radio stations. Listeners called in to guess how many Scratchers the DJ placed under his tree. The first listener to guess correctly won 21 Lottery Bucks in a Christmas stocking. Here is an example of one of the 30 second holiday promotional announcements:

“It’s an ever-GREEN Holiday with holiday Scratchers from the New Mexico Lottery! Give the gift of green with a gift of Scratchers. They’re easy to wrap and one size fits all. Plus they offer top prizes ranging from $1,000 to one hundred thousand dollars! Tune in to (station’s name) for your chance to win! The first caller that can guess how many Scratchers the DJ placed under the tree will win a stocking and twenty one (21) Lottery Bucks to purchase all five New Mexico Lottery holiday Scratchers. And have a Merry Green Holiday!”

Major lessons learned in 2015: This is the first time we have offered so many holiday games. I believe the approached worked well for advertising and the players seemed to like having a big variety of games.

New York Lottery New York’s holiday lineup included four games: one each at $1, $2, $5 and $10.

Most successful game(s): We launched four holiday tickets on November 17, 2015: $1 Baa Humbucks, $2 It’s a Wonderful Life, $5 Holiday Treasures and $10 Frosty Cash. We were particularly pleased with the performance of the $1 game as it outperformed prior $1 holiday tickets with a whimsical look and theme. The lineup did quite well with the inclusion of a major sweepstakes centered around the $2 It’s a Wonderful Life ticket.

52 INSIGHTS March/April 2016 General holiday strategies: The has remained consistent on themes, sales periods, price points and sell out goals since 2012. In 2012 the decision was made to launch a $1, $2 or $3, $5 and $10 game each year on the Tuesday prior to Thanksgiving to increase the holiday game focus. These games were highlighted with no other launches to distract players or retailers. The strategy has worked very well. We do not set any sell out goals, but rather project anticipated sales and order additional quantities to meet retailer stocking demands through the holiday period, anticipating repeat purchasing after gifted winners are claimed.

We leveraged the brand equity of the It’s a Wonderful Life licensed property and made it the foundation of our Make Life Wonderful marketing campaign. Built upon the new playful New York Lottery brand image, the Make Life Wonderful campaign featured talking holiday ornaments that came to life in TV, radio, digital, outdoor and social media. A unifying visual treatment had a retro feel to continue to capitalize on the strength of the It’s a Wonderful Life property.

The holiday campaign featured a second chance sweepstakes that encouraged players to purchase all of the holiday scratch-offs to earn bonus entries. The grand prize was $500 a week for life, further building upon the It’s a Wonderful Life theme.

Major lessons learned in 2015: Players are looking for whimsical and fun $1 games at an increasing rate compared to prior years. We also learned that the $10 price point is advantageous when introducing an instant game designed to stand out from the everyday routine. During 2014 we used an oversized ticket of a traditional theme that caused quite a bit of talk as well as sold very well. In 2015 we introduced a $10 instant game that delivered good results using a new printing treatment, creating a look of sparkle and texture that was well received. We will be on the lookout for unique ideas for our 2016 $10 game as well.

INSIGHTS March/April 2016 53 North Carolina Education Lottery North Carolina’s holiday lineup included five games: one each at $1, $2, $3, $5 and $10.

Most successful game(s): This year’s holiday ticket lineup ranks as our most successful ever. We sold 90 percent of all five games by the second week of January. Peppermint Payout, a $3 extended play game, ranked as the most popular. Traditionally we offer a holiday-themed bingo or crossword game at the $3 price point, but this year we decided to do something different with a different play style at that price point. The game performed 60 percent better than the $3 crossword game that we sold the previous year.

General holiday strategies: The overall strategy for our holiday scratch-off games remained similar to the prior year. The biggest difference was that we did not do five games with a similar look/theme. We used a couple of games that had performed well in prior years at the $2 and $5 price points. We increased our ticket quantities across the entire set of games. And we were able to increase sales by 14 percent year over year.

We supported ticket sales with an integrated advertising, marketing and social media campaign. Our holiday ad featured an office holiday gift exchange where colleagues fought to be the one who ended up with the set of holiday lottery tickets. We continued to experiment with social media, offering a social media quiz, supported by a microsite that allowed participants to take a quiz to determine what type of gift-giver they were. Quiz takers could share the results with friends through Facebook and Twitter, helping us to raise awareness of the holiday tickets and create more engagement with our social audience.

Major lessons learned in 2015: We learned that the $3 price point is important to growing the holiday scratch-off category. Choosing the right game or play style can result in significantly higher sales and can provide an opportunity in the future for increased revenues.

Ohio Lottery Ohio’s holiday lineup included five games: one each at $1, $2, $3, $5 and $10.

Most successful game(s): Holiday Cash was our top-selling $1 game and the top-selling holiday game based on the number of tickets sold.

General holiday strategies: We released five holiday-themed tickets on October 22, 2015: $1 Holiday Cash, $2 Holiday Gold, $3 Holiday Bingo, $5 Holiday Lucky Times 10 and $10 Merry Money. We offered the same price points the previous year, with similar themes. Two games, Holiday Cash and Holiday Lucky Times 10, were sold in both years and are mainstays of the holiday instant ticket product line.

Our product and image campaign for the holiday season included advertising at retail and out-of-house, as well as via TV, radio and digital and social media platforms. We developed our first stop-motion animated TV spot to encourage the spirit of giving and sharing. Its puppet figures were designed to appeal to both a millennial and boomer audience. The holiday campaign was designed with the help of advertising vendor Marcus Thomas.

In a record-setting season for sales, total instant game sales for the holiday season (from the week ending October 24 to the week ending December 26) were $325.6 million, up 3.8 percent compared to the prior year. Sales for the five holiday-themed games for the same time period were $76.7 million, down 8.8 percent or $7.4 million compared to sales for the five holiday-themed games the prior year. We brought back the Holiday Bonus second-chance promotion in October for customers purchasing holiday instant tickets. Players entered tickets through the lottery’s online loyalty program, MyLotto Rewards. Like the previous year, the second-chance drawing offered $500,000 in total prizes. There were 4.74 million entries compared to 4.77 million the prior year.

As of March 5, all of the 2015/2016 holiday instant games were 70-71 percent sold. Holiday Cash, Holiday Gold and Holiday Bingo will close May 12, 2016. The higher-priced games, Holiday Lucky Times 10 and Merry Money close April 28, 2016.

Major lessons learned in 2015: Potentially, the would like to revisit the second-chance drawing and add some additional features for the 2016 holiday season.

54 INSIGHTS March/April 2016 Pennsylvania’s holiday lineup included six games: one each at $1, $2, $3, $5, $10 and $20.

Most successful game(s): The $20 Holiday Millionaire had all the visual ingredients that make a hit, and we significantly added to its play value by adding even more bonus play features. But it also ushered in a new payout distribution within its prize structure to help the day-to-day winning experience be distinct and differentiated from our $10 games, as well as the still relatively new-to-the-scene $30 game. Holiday Millionaire put special emphasis on winning experiences. There were five break-even wins per pack, compared to four the previous year, and the number of $50 and $100 prizes doubled. And results were strong: Holiday Millionaire was up 29.8 percent over the previous year’s $20 holiday game.

General holiday strategies: At the Pennsylvania Lottery, the holiday season continues to be a critical boost midway through the fiscal year. Players are in a spending mood and retailers are motivated to sell! The Lottery maximizes its revenues during this time of energized marketplace conditions, and we were happy to earn record- setting instant sales during the week ending December 28, 2015. Bringing in nearly $75 million, we saw a 9.6 percent growth over 2014’s big holiday week (a previous record).

All divisions of the Lottery must come together and shine to generate a big holiday season, but three notable changes to our holiday strategy paid off. First, addressing the $20 as noted above. Next, the return of Gus, the Pennsylvania Lottery’s spokes-groundhog. After a several-year hiatus, players were delighted to see him appear in a holiday season TV commercial. And finally, the reinstatement of a mid-holiday season instant game launch. We have a long-established product schedule that introduces an average of five new instant games near the end of every month except November, when the entire focus has been on the holiday-themed games. However, research showed that regular players were eager to see new games, even in the midst of the holiday season. In response, we did a four-game launch, featuring the return of our For Life family of instant games, on November 24. The instant holiday games (with the exception of the $20) were down 5 percent, but overall the entire holiday season was up an average of 10 percent, and over 65 percent of the growth can be attributed to this interim November launch. Once again, the players demonstrated the power of offering a fresh chance to win.

Skimp someplace else… …not where everyone’s watching!

To see the latest creations From Smartplay visit our website at www.smartplay.com INSIGHTS March/April 2016 55 South Carolina Education Lottery South Carolina’s holiday lineup included two games: one each at $1 and $2.

Most successful game(s): South Carolina has a minor holiday ticket program. Of the two actual holiday tickets, $1 Baa Humbucks would be the more successful of the two tickets.

General holiday strategies: In FY16, we launched a $1 and a $2 holiday ticket in October (with a lower ticket quantity) and also launched a non-holiday $5 and $10 ticket in complementary holiday colors. The $1 and $2 holiday tickets featured a retro theme this year. As far as advertising, we do not change typical instant ticket advertising strategy (in-store POS and in-store PID) for holiday tickets. We did use the $5 Ruby Red ticket to introduce dual color imaging to our $5 price point, which was very well received by our players.

South Dakota Lottery South Dakota’s holiday lineup included three games: one each at $1, $2 and $5.

Most successful game(s): The $1 Tis The Season game sold better than the $2 and $5 tickets.

General holiday strategies: The three 2015 holiday games had a higher payout percentage. All three did well but we also had a record Powerball jackpot run that helped drive instant ticket sales also. We didn’t get a clear measure of the higher payout’s success or failure. The 2015 holiday advertising campaign was our first big campaign with our new advertising agency. While in the past our seasonal campaigns focused mainly on the holiday tickets, the 2015 campaign was more general with the focus on lottery tickets of any kind as good gift ideas.

Major lessons learned in 2015: I think we saw a lot of non-holiday tickets purchased as gifts but it was hard to tell with that giant Powerball jackpot run thrown in there. Players may just as well have been buying scratch tickets while they were buying lotto tickets without intending to give them as gifts.

Tennessee Lottery Tennessee’s holiday lineup included four games: one each at $1, $2, $5 and $20.

Most successful game(s): Overall, the most successful holiday game that launched in November 2015 was the $5 game, Merry Money, as it had the highest total sales and generated the most return for education, while also having a sales index of 109. From the perspective of sales index, the best performing holiday game was the $1 game Holiday Cash, with a sales index of 119 at the 8-week mark.

General holiday strategies: A significant change from 2014 was the introduction of the holiday-themed $20 game, Golden Greetings, in October 2015. The $20 game performed well and had a short- run quantity to sellout during the holiday season. Then in November, three traditional holiday games were launched, along with a regular $10 game, Lady Luck 7. Advertising/ promotional support included television and radio commercials in December along with web banner, in-store point of sale and display on digital monitors.

Major lessons learned in 2015: The $500 top prize on the $1 game makes terrific sense for a short-run holiday game. A holiday game (or games) in October may be considered again.

56 INSIGHTS March/April 2016 Texas Lottery Texas’ holiday lineup included six games: two at $5 and one each at $1, $2, $10 and $20.

Most successful game(s): We offered holiday scratch games across a variety of price points from $1 to $20 to deliver a game to satisfy every consumer. As of late, our $10 and $20 holiday price point games have performed very well, but this is what the Texas market seems to prefer. The $20 Holiday Game Book remained very popular with our players.

General holiday strategies: We did not make significant changes from what proved to be a successful strategy the previous year. Our strategy has been to start launching games in October with advertising support beginning in November. Our goal has been to print enough inventory to sustain sales from each game’s launch date to late December/early January as sales for holiday or winter themed games begin to decline. Our highest sales during the year come in January, February and March so we have made it a point to clear out holiday themed games quickly replacing them with fresh product.

Major lessons learned in 2015: Players seem to be diversifying their purchases during the holiday season. Our holiday game sales were down slightly from 2014, but we still had significant year-over-year gains throughout our entire scratch portfolio. While we will continue to launch a quality suite of holiday games each year, we may dial back the number of holiday games that we launch next year. For example, in 2016 we will not be launching a specific holiday $20 game. Instead, we will have a new $20 Pop-n-Pak scratch game in market and we will also introduce a $20 game in December that will leverage traditional holiday colors (red/gold or blue/silver) but will not be holiday themed. This will allow us to keep that product in market into the start of the next calendar year.

INSIGHTS March/April 2016 57 Virginia Lottery Virginia’s holiday lineup included five games: two at $1 and one each at $2, $3 and $5.

Most successful game(s): We consider $5 Merry Money our most successful game this holiday season. With a game index of 145 and average weekly activations over $1.2 million, it outperformed all other games in market during the holiday season. Designed to appeal to our core players, Merry Money featured cash imagery on the ticket art and included multiple play areas – a unique offering for our $5 price point during that time.

General holiday strategies: This year’s holiday game lineup, in market from November 3 to January 3, was comprised of five games. Our $1, $2 and $3 games had traditional holiday themes, but we also added a seasonal themed $1 game and a $5 game with a unique theme, leveraging both holiday and money imagery.

In addition to our holiday lineup, we launched two additional games that not only offered seasonal appeal, but also were designed to stay in market outside the short holiday season. Our $10 Green ticket, which launched in October of 2015, offered both seasonal and high-roller appeal. In December, we followed up with two additional games, a $20 game, $3,000,000 Fortune, and a $2 game, All That Glitters.

During the holiday period our sales beat goal by $815,000 per week, and by January 2, our scratch category sales were $5.567 million ahead of the FY16 goal, directly attributable to incremental sales of holiday games.

Since the holiday season brings in more new players than any other time of the year, our strategy was to load these games with low-end prizes to give new players a better opportunity for a winning experience. All of our holiday games also featured eXTRA, our unique second chance program, which allowed players to enter their non-winning holiday tickets for instant cash card wins and entries for a $150,000 cash prize. With the eXTRA Holiday promotion, we had 78,852 total participants, and we added 28,941 new players into our database.

Advertising and promotional support for our holiday games ran from November 16 to December 25 and included TV, cable, radio, digital, cinema and OOH.

We made changes to our prize structures this year to create more winning experiences for new players. We increased the payouts and the top prizes for each of our holiday games and loaded the prize structures with low-end prizes. We also made changes to our $5 strategy this year. Last year, our $5 game was a pulsed game with one holiday pulse and a second non-holiday pulse. This year’s game was completely focused on holiday and featured cash prominently to attract our core players.

Major lessons learned in 2015: Perhaps the most important takeaway was player appetite for higher price point games in our holiday mix as evidenced by the stand out performance of both our $5 Merry Money and our $10 Green games. Another key takeaway was the continued player enthusiasm for our eXTRA promotions. Over the course of this promotion 63 percent of all visitors to our website came to enter promotions such as eXTRA.

Washington’s Lottery Washington’s holiday lineup included five games: two each at $1 and $5, and one at $2.

Most successful game(s): Frosty Crossword was a runaway success. This was our first holiday themed crossword and our players loved it. The combination of a crossword game and an adorable snowman was a hit.

General holiday strategies: In 2015 we offered two $1 games, a $2 Crossword and two $5 games. The biggest change from previous years was to have a holiday themed extended play game. We did radio and print advertising for the holiday games and promoted them at our mall kiosks.

Major lessons learned in 2015: We don’t need to have two $5 games. If we do an extended play game in 2016 we need to print more tickets. We had different prizes on the $1 games ($500 and $1,000) and would offer that again.

58 INSIGHTS March/April 2016 West Virginia’s holiday lineup included three games: one each at $1, $2 and $3.

Most successful game(s): Our most successful holiday ticket was the $2 Frosty Fun. It sold out in the anticipated time frame and had minimal returns after the new year.

General holiday strategies: Our goal in 2015 was to have the three price points in the field for 8 to 10 weeks with support from retailer digital displays, web banners, and a short run “gift” television spot. Order quantities were adjusted slightly in our second year of a shorter sales window based on retailer and player feedback that starting before November 1 was too long to be on sale.

Major lessons learned in 2015: Players and retailers responded to our changes as we had hoped.

INSIGHTS March/April 2016 59 60 INSIGHTS September/October 2013 Save the Dates!

October 4-6, 2016 NASPL 2016 Hosted by the Georgia Lottery Corporation Atlanta, GA

2016 CONFERENCE CALENDAR 2017 CONFERENCE CALENDAR

May 3-6, 2016 October 4-6, 2016 March 2017 La Fleur’s 2016 Lottery Symposium NASPL 2016 Annual Conference Problem Gambling Awareness Month & Retailing Summit Georgia World Congress Center Capital Hilton Omni Hotel April 2-7, 2017 Washington, D.C. Atlanta, GA NASPL Lottery Leadership Hosted by Georgia Lottery Corp. Embassy Suites Downtown June 13-17, 2016 St. Louis, MO NASPL Spring Directors’ Meeting October 18-21, 2016 Hosted by Missouri Lottery Inn on Biltmore Estate NACS Asheville, NC Georgia World Congress Center June 19-22, 2017 Hosted by North Carolina Education Atlanta, GA NASPL Spring Directors’ Meeting Lottery Metropolitan 9 November 6-9, 2016 Cleveland, OH July 15-16, 2016 World Lottery Summit Hosted by Ohio Lottery Commission 30th National Conference Singapore on Problem Gambling July 24-28, 2017 NCPG NASPL Professional Development Seminar West Chester Marriot Renaissance Hotel Tarrytown, NY Nashville, TN Hosted by Tennessee Education Lottery Corp. Aug 1-5, 2016 NASPL Professional Development Seminar September 2017 Omni William Penn NASPL 2017 Annual Conference Pittsburgh, PA Location to be determined Hosted by Pennsylvania Lottery October 17-20, 2017 September 26-29, 2016 NACS G2E McCormick Place Las Vegas, NV Chicago, IL

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